LONDON, June 27, 2011 /PRNewswire/ --
Gold rose to an all-time high in late April, and its price continued to stay above its 50-day moving average in May. How long can the gold rally continue? Sandy Jadeja of City Index (http://www.cityindex.co.uk/) sheds some light on the situation.
"It was in 2002 that technical indicators showed signs of a bullish move that has helped gold reach meteoric highs and set the commodity on a parabolic rise, which has not shown any signs of weakness," states the financial trading analyst.
"However there are some technicians who believe that a correction is in the making. In 2008 after reaching a high of $1,039 Gold fell to a low of $724 and has since then only seen minor pullbacks. The current move from the $724 low appears to be a Wave three in an Elliot Wave formation. If true then a correction equal to the previous move could see a loss of -30% or greater take place."
Spread betting and CFD trading both allow you to profit from a falling market as well as a rising one. This ability to short sell could prove invaluable for gold speculators. Mr. Jadeja continues:
"As long as Gold can maintain its pricing level above $1,389, the bullish trend is likely to continue. If a break below this level takes place then a correction towards $1,250 could become a possibility and if the decline takes a severe turn, then the doors could open to $1,050.
"Until a reversal takes place the price of Gold looks set to continue higher for the near term."
Learn more about financial spread betting and CFD trading on the price of gold with City Index at:
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through City Index trading platforms
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, spread betting.
We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. For more information, visit http://www.cityindex.co.uk/.
Share this article