By Kitco News
Wednesday October 12, 2016 08:43
(Kitco News) - Major U.S. investment bank Goldman Sachs sees the gold market at major technical crossroads, noting that this past year the market has been in a “corrective process” since hitting the multi-year lows in December.
In a technical analysis report published Tuesday, analysts at the bank said that gold needs to recover the $1,303 level to restart its recovery process.
In the meantime, investors and traders need to pay attention to the $1,250 level as a break below that could lead to a test of the next support at $1,211 an ounce. December Comex gold futures are seeing some modest selling pressure Wednesday with prices last trading at $1,254.6, down 0.10% on the day.
“It's since seen the A and B legs of an incomplete ABC. Again, it's common for B waves to be more contracted/complex. As such, the market needs to break meaningfully past 1,303 (early-September low) to suggest potential to have started its final C wave advance,” the analysts said in their report. “The next downside level to watch is 38.2% retrace at 1,250. A break lower will open up risks to 50% retrace at ~1,211-1,200.”
The bank’s technical analysis comes less than a week after the bank said that a drop below $1,250 would be a “strategic buying opportunity” because of growing risks to the global economy.