As of 15 June 2012, Gold (XAU) price has been slowly gaining momentum to climb towards the 150 Day Moving Average (DMA). This is a critical support level that has been broken in mid Nov 2011 and in early Mar 2012. So far, Gold price has not been bullish since the beginning of 2012. Prices have been moving up & down, but have yielded price movements which provided great opportunities for swing traders who took both sides (buy & sell) of the trades.
Gold price has been moving up lately, partly due to the Spain banking bailout for the moment. But this Sunday, investors wait with bated breath of the outcome of Greek election. Will the hard-left bailout-denouncing Syriza party win the election? If so, will the leaders declare their intention to default on Greece's debt and leave the Euro Zone. Experts felt that the impact has been factored into the market. They have been used to discounting and anticipating the failure of Greece's government to meet its financial obligations.
So will the outcome of the Greek election create a major impact to the Gold price movement? Watch the price level at the 150 DMA very closely. If it breaks below this support line again, I will be very cautious with my Gold buying strategy. I will take more opportunities with my sell trades.
Take care,
Tony Chai
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