After hitting $1750 an oz earlier today the yellow metal fell back to $1741 before forming an ‘upside down head and shoulders’ bullish pattern that pushed the price back to $1750. It now remains to be seen whether this double top formation will signal another pull back, as they often do, or whether this price will act as a serious resistance level in the short term.
Subsequent price action in the last half hour suggest that gold will take a breather and digest its recent strong upward momentum. Long forward positions in the metal remain strong although some profit taking has occurred and more may be due as gold has enjoyed its biggest US dollar monthly gain since 1999.
India Raises Gold Import Taxes – Again
Today sees the development of one short term cloud on gold’s horizon to take into account. The Indian government is introducing a rise in the base import price of gold effectively creating a rise in the import tax. With Indian gold demand being the worlds largest, it remains to be seen how big a factor, if any, it will become on the volume of bullion the country imports and if it results in any significant downside impact on the price. This comes on top of a doubling of the duty on gold last month which has been reported, as expected, of having an an adverse affect on Indian demand.
Category: Precious Metal Investment News