Gold showing some strong bull signal
Bargain hunters have stepped into the market and this is supporting the price of gold. The precious metal is in demand to some extent as the dollar index has retraced from its highs. The softening of the dollar index is definitely an important element, and this softness is mainly due to some weakness in the economic data. From a technical perspective, if the support of 1250 holds, the odds would be strongly stacked for a move which could lead the price to 1300 mark. Between now and the end of the week, we think the US Non-Farm-Payroll data has the most importance and any weakness in this number, would take more steam out of the dollar index. The weaker dollar would push the price of the metal even higher.
In terms of techncial analysis, the price has broken its downward trend and would enourage a move to test the second downdward trend line. Only a break of that would lead the price to test its moving 200 & 100 day (green and yellow respectively) moving averages.
