Commodity - Gold: Double bottom at key support level

The precious metal had for four consecutive weeks slide in value from a high of $1191.39 reached on 15/10/2015 to a low of $1073.94 per ounce seen on 12/11/2015. The downtrend had largely been as a result of the Federal Reserve signal that it may be ready to hike the benchmark interest rate, also a strong rally in the dollar (Gold and the Dollar trends in inverse relationship) has seen investors seek safe haven in the Dollar having downward pressure on Gold.

From a technical standpoint, the downtrend may have reached an exhaustion level since the commodity closed above key support at 1081 August low forming a double bottom. MACD on the daily timeframe signaling a possible weak momentum in the downtrend and a positive divergence.

A rebound may be seen in the coming trading sessions possibly towards 1131 a 50% Fibonacci retracement level of the current downtrend while on the other hand, price action daily close below 1081 would reiterate the strong downward trend in the metal.

Analyst Expectation:

Rebounds expected towards 1131 though the broader bearish outlook remain unchanged.

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