Weekly Report 18/04 -22/ 04/ 2011

Gold inclined sharply during the previous three days, achieving our suggested bullish scenario. Now, we can see how the metal is still trading positively, affected by the harmonic pattern seen above. This harmonic formation consists of the harmonic butterfly pattern with extended targets and AB=CD pattern which we believe that the metal is achieving its CD leg. Thereby, more bullishness could be witnessed during this week, noting that the price behaviors should be watched out very carefully around 1494.00 and 1508.00 as a breakout above these levels will send gold higher towards 1523.00, followed by 1547.00, where 224% and 261.8% projections levels of CD leg of AB=CD exists. On the other side, if it failed to maintain levels above 1508.00 then this level will act the role of PRZ for the harmonic pattern since it is a bearish pattern.

The trading range for this week is among the key support at 1438.00 and key resistance now at 1547.00.

The general trend over the short term basis is to the downside, targeting $ 1208.00 per ounce as far as areas of 1508.00 remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, buying gold around 1485.00 gradually targeting 1500.00 followed by 1523.00 and stop loss with a daily closing below 1468.00 might be appropriate.