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."
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SOURCE City Index PR