Gold: Further downslide may take it to test May 2012 low of $1527 in the near term, says Mecklai graph.
Mecklai graph of the day - Lost glitters
Gold, seen by many as a hedge against persistently high inflation has seen some downfall in the recent days. A healthy recovery of US economy backed by a better performance of equities eroded a demand for the precious metal as a store of value. It printed a low of $1595 and Friday's loss of $44 marked as bullionâ€™s biggest one-day drop since December 2012. Twenty analysts surveyed by Bloomberg this week expect gold to fall next week, while 11 were bullish and three were neutral, making the proportion of bears the highest since Dec. 30, 2011.
Revisiting our earlier graph dated 5th Feb on the yellow metal; it has broken the support of $1660 and thereafter touched the low of $1597 as compared to the mentioned target of $1610 (100-weekly EMA). Looking ahead, further downslide may take it to test May 2012 low of $1527 in the near term. However as daily and weekly stochastic are in extremely oversold region, a corrective up move might be seen to $1640-$1650.
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