Special Focus on GOLD ahead of Swiss vote on gold holdings!

On Sunday , the 30th of November 2014 , voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should increase its gold holdings to 20 percent, up from current levels of 7 percent. and refrain from any further selling of Swiss gold.

The most important point or question is ; How will the market react to such news ?!!

We have 2 scenarios, but before we continue , let’s highlight monthly and weekly time frame first  :

Monthly Chart : the pair is very bearish according to monthly time frame , already rejected from monthly resistance 1204 , note that yesterday was the last day of the month , so it remains under heavy pressure , any rise above 1204 should be limited by 1289 first , next main levels comes at the 1333/1392 levels….

Keep in mind , as long as 1392 holds on a monthly closing basis , the XAUUSD remains down towards the 980 levels ahead of the 680 levels.

Weekly Chart : Despite the last decline , the pair remains in recovery mode , and further upside couldn’t be ruled out as long as support 1161 holds on a weekly closing basis , resistance comes at the 1235 levels ahead of the 1257 levels ,further upside will aim the 1292 levels where fall resumption is suggested ….

On the downside , hidden bearish divergence is under development , a clear break below 1161 levels will have large bearish implication towards the 1044/980 levels where a cut will open 680 levels …

Conclusion (Technical summary ):

Rise from 1331 levels – If seen – should be limited by 1257 /1292 levels where strong fall is suggested  for 3 reasons : 

  • The key resistance 1292 is a strong weekly resistance confirmed by weekly %R(Williams) , (low of the week July 13 2014).
  • The Key resistance 1292 is confirmed by Fibonacci retracement 61.8% of 1131/1392 run at 1292 …
  • The key resistance 1289 which is close to 1292 is confirmed by monthly %R(Williams) (High of Sept 2014)..

Now let’s back to voters in Switzerland tomorrow , we have 2 options , Yes or No !!!!

Option number 1 : Voters say NO

If seen , the down trend is likely to resume , the pair should reach 1000 levels very quickly within (1 :3) weeks range …

Option number 2 : Voters say Yes

If seen , Swiss National Bank would only save the GOLD from a massive fall , If this scenario happens , don’t expect too much , the XAUUSD would rise a little bit , or it will trade in the current range for a while before the next big fall ,It won’t collapse of fall quickly , It will happen slowly !!!! why It will fall later ? the XAUUSD can’t make a huge rise for 3 reasons : lack of demand , China and strong USD , any rise should be limited by 1257/1292 levels .

Last word , I think voters will say YES !!!! It’s just a hunch !!!

 

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Gold_monthly_swiss

 

MARKET DATA

UPCOMING ECONOMIC EVENTS

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