By Kim Kyoungwha
Aug. 5 (Bloomberg) -- Gold’s advance to the highest level in two months may stall before it reaches so-called resistance at $972 an ounce, Commerzbank AG said, citing trading patterns.
The resistance level is the 78.6 percent retracement of the move down from a June peak of $990.75, Karen Jones, a technical analyst with Commerzbank, wrote in a note yesterday. Resistance levels are where sell orders tend to be clustered.
Gold for immediate delivery fell 0.1 percent to $965.69 an ounce at 10:54 a.m. Singapore time. The precious metal, up 9.5 percent this year, touched $970.47 yesterday, the highest price since June 5.
“Near-term strength is viewed as an elongated correction only,” Jones said. “Our long-term bias remains negative. We view the $1,000 region as a ceiling for the market.”
A slide to less than $943.90, where there is 55-day moving average and Fibonacci support, “should be enough to alleviate upside pressure and cast attention back to $925, then the $904.80 support,” the report said.
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
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