Gold: Technical Support at 200-Day Average? - Wednesday 18th June 2008.

Technical analysts at UBS point to strong support at the 200-day moving average...

IS THE GOLD PRICE about to shoot higher by 50% or more?

Big institutional players in the New York futures market slashed their bullish betting on Gold in the week to June 10th.

Data from the CFTC – the US regulator – shows a net reduction of 11% in the long gold positions held by what it calls "large speculators". And this "reduction in the gross longs maybe a further sign that Gold is losing its attraction," reckon analysts at UBS, the Swiss banking and wealth management giant.

That's what "happened last year," it adds.

But less pressure from large investment funds, could alternatively, show more froth coming off the Gold Market since it shot 54% higher in the seven months to mid-March.

Topping out at a new all-time record above $1,032 per ounce just as the Federal Reserve lent $29 billion to support J.P.Morgan's fire-sale purchase of Bear Stearns, the Gold Price has gone on to drop 15% of its value against the Dollar.

Versus the Euro and British Pound, the loss has been just as dramatic. But looking at the technical action on its charts of the Gold Price, "any meaningful bounce from the 200- day moving average could bring back a lot of money into gold," the UBS comment goes on.

The 200-day moving average, as the name says, measures the average price of an asset over the last two hundred days. It's called "moving" because... [Read more]

Source: http://goldnews.bullionvault.com