GOLD: Tumbles Off the 1,632.85 Level, Risk Builds On Key Support

[Mohammed Isah]

GOLD: GOLD has ended its corrective recovery as it tumbled off the 1,632.85 level on Monday and continues to sell off. This development now leaves the commodity targeting 1,557.30 level, its Jun 08’2012 low where a break will drive it further lower towards its key supports located at the 1,557/27 levels. A cut through will resume its broader medium term weakness and then pave the way for further declines towards the 1,500.00 level. Price hesitation could occur here but if that level gives way, expect Gold to decline further towards 1,478.05 level. Its daily RSI is bearish and pointing lower supporting this view. The alternative view will be the commodity to return above the 1,632.85 level thus opening the door for more upside towards the 1,670.70 level. Further out, resistance stands at the 1,700 level. All in all, GOLD continues to hold on to its broader medium term downside as it looks to resume that trend.