May 14 (Bloomberg) -- Gold may extend its two-week advance after breaching the so-called resistance level that defined the precious metal’s bear trend since this year’s peak in February, Standard Bank Group Ltd. said, citing trading patterns.
This indicates the “corrective phase has ended,” Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. “This is a positive development, but we are not currently forecasting a move to a new high.” A resistance level is where sell orders may be clustered.
“A break above $932 is forecast in the weeks ahead, yielding a move into the $960 to $966.70 area, from where a reaction is envisaged,” Grabham wrote.
Gold for immediate delivery traded little changed at $925.47 an ounce at 10:01 a.m. Singapore time and has gained 1 percent this week. The precious metal is down 8 percent from this year’s intra-day high of $1,006.29 on Feb. 20.
The advance may stall at $932, with the $900 to $890 area providing support to ensuing retracements, Grabham wrote. If the anticipated sell-off does not materialize around $960, the rally may extend to $980.
“Gold weakness back below $890 turns the outlook neutral, while continued selling through $880 again exposes the market to the pivotal $869 to $865.80 support base,” he wrote. “A sell signal will be initiated below $865.80, initially yielding a decline to $840.”
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