Commerzbank Says Gold May Rise to $1,162
Source: Bloomberg, Nicholas Larkin (3/3/10)
"Gold. . .may climb toward $1,162 an ounce should prices hold above $1,135."
The attached chart shows gold is near a three-month resistance line, its February highs and a 50% retracement of its slide since December. The second chart shows bullion may climb to $1,150–$1,162 if prices hold above $1,135.
The $1,150 level would be near a 61.8% retracement of the metal's drop since December, according to a series of numbers known as the Fibonacci sequence, while $1,162 would equal the January high. Gold reached $1,138.50 today, the highest price since Jan. 20, and traded at $1,136.45 at 10:44 a.m. in London. The metal is up 3.6% this year.
"The fact that last week's correctly anticipated fall only took the gold price to $1,088 before giving way to another leg up shows underlying strength," Axel Rudolph, a technical strategist in London, said in the report. "This is why we will become short-term bullish if, and only if, the $1,135.50, 50% Fibonacci retracement is overcome."
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.