Strong negative news resulted into sharp reversal in Precious metals, Base metals and Energy prices in opposite direction.
Economic Times:“Gold prices tumbled on Monday after Swiss voters overwhelmingly rejected proposals to boost gold reserves in a referendum, joining a broad rout in commodities that sent copper and oil prices to four- and five-year lows.”
It is therefore prudent not to trade based on news as you can be amongst the majority entering in wrong direction exactly at the wrong time.
Now below is the analysis on Gold using objective methods -
MCX Gold Continuous Daily chart:
Below is a brief excerpt picked up from “The Commodity waves” research report published daily before market opens.
MCX Gold started the day on negative note. Prices moved lower and exceeded the level of even 25500 on downside. However, there was sharp reversal during later part of the day across the bullions and base metals.
Important news comes near the crucial lows or tops. The news of Swiss reject to hold more Gold resulted into a sharp down move but only temporarily and the reversal happened equally hard.Such negative news and reversals usually can result into a very crucial low formation.However, it is too soon to conclude that and we need more price action along with higher highs and higher lows formation to confirm that Gold has indeed managed to protect the magical number of 25000 yet again!
Now looking at the short term wave counts (shown in actual report to subscribers)
During such times when an asset moves against the expected news it provides vital technical information to us. Gold has continued to protect 25000 mark for many months now. It has reversed from the crucial zone but for short term trading it is prudent to look at important support and resistance levels to get good trade setup. Subscribe to “The Commodity waves” research report and get insight into Gold, Silver, Crude, Copper and intermittently on Lead, Zinc, Natural Gas, etc. Or directly get intraday / positional calls on Yahoo messenger or via sms by subscribing to our Commodity advisory service with FREE research reports. Simply visit http://www.wavesstrategy.com/index.php/store.html for subscription options.