03.04.201407:01 Forex Analysis & Reviews: Technical analysis of gold for April 3, 2014

Considering a physical flow perspective, we believe that gold prices have been supported by renewed inflows into exchange traded funds, ongoing emerging markets central bank purchases and increased gold imports into China via Hong Kong.The gold market did not react much to the U.S. economic data released Wednesday. The U.S. data is forecast to show services industries and non-farm payrolls strengthening, supporting the case for the Federal reserve to pare stimulus. The Labor Department will probably say tomorrow employers added 200,000 jobs last month, versus 175,000 in February, according to the median estimate of economists polled by Bloomberg news. The US data will show further direction in gold prices.

Technical view-

The gold price has been in a down trend from $1,390 levels. In yesterday's trades, short covering made gold move on a bit higher. In Asia's trading session, the metal is trading at $1,292 levels. Yesterday, we recommended to take long positions. Still, we are recommending the same. On the upside intraday basis, the price is facing resistance between $1,296-$1,298 levels. Once the price breaks the $1,298 level, huge short covering will take place and the price will move to $1,307 and $1,313 levels.

On the downside, $1,289 is the strong support on a intraday basis. If it breaks, one can sell for $1,283, $1,280, and $1,277 levels. More panic is only below $1,277 for targets $1,270, $1,265, and $1,261 levels. A day close above the $1,29$1 level, we can see the higher levels at $1,307, $1,313, and $1,325 levels.