Will Gold Hit $1100 Today?

Spurred on by the news of Indian central bank buying, gold hit an all-time high yesterday and then again today. Will it hit $1100 before the Fed statement tonight?

Last week’s look at bling highlighted a technical sell signal, but felt that support in the 1025-30 region would hold true (Gold Trades Below Triangle Support).

Sure enough, the price did break below the 21-day moving average, but bounced off the mentioned support. The rally continued back above the rising 21-day moving average trend line and yesterday made a fresh all-time high. The media drew attention to news that the Indian central bank had bought gold from the IMF, but this story was out on Monday night/ Tuesday morning; gold’s big move happened late afternoon when I was watching my lad play rugby!

The uptrend is back on with rising MACD, RSI and moving averages. The Parabolic SAR is in ‘Buy’ mode and the Bollinger bands are obligingly widening. So, $1100 today?

I reckon so, and will probably put a small cheeky bet on it. At the time of writing the price is a bit overcooked with the 30-minute chart showing an RSI of 80. I’m not sure there’ll be much of a pullback, but I might look for an entry at, or just below, $1090. I’ll place my stop loss at $1060 in case there’s a nasty reversal, but I’ll be looking for the previous resistance at $1065 to act as support now.

The less cheeky, more responsible, trade would be to hang out for a test of the $1065 support and then buy to target $1100, but there might be scope for both.

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