As voters rejected the referendum on Friday for the Swiss National Bank to hold 20% of assets in gold, the commodity price slipped but today is recovering.
At the same time silver, which tends to correlate with gold, fell to new lows and recovered today.
The referendum in Switzerland to force the Swiss National Bank to hold 20% minimum of its assets in gold, to ban them from selling any of the gold and to repatriate gold held abroad, had a majority vote against the plan with 77 percent of the public vote. In a press release, the SNB reported, “The Swiss National Bank (SNB) is pleased to hear of the outcome of the gold initiative vote. The SNB has a constitutional and legal mandate to conduct monetary policy in the interests of the country as a whole. It is charged with ensuring price stability while taking due account of the development of the economy. An acceptance of the initiative would have severely constrained the SNB in fulfilling this mandate. With conditions unchanged, the SNB can now continue pursuing its monetary policy geared towards price stability. In the current situation, the minimum exchange rate against the euro remains the key instrument for this purpose. The SNB will continue to enforce the minimum exchange rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities to this end. The SNB will take further measures immediately if required.”
Gold fell in response on Friday. On Sunday gold opened with a 2% downward gap, however it achieved a price recovery on Monday from 1142.86 to 1164.52, filling the gap. Gold has been falling on a downward trend since October 2012.
Silver also fell with gold, following the gap and recovery pattern over the course of the weekend.
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Gold - Day Trading Strategies
Bearish scenario: Short positions below the daily pivot point 1179.15$ with targets at 1160.10$ next 1144.95$ in extension.
Alternatively, Bullish scenario: Long positions above the daily pivot point 1179.15$ with targets at 1194.25$ next 1213.35$ in extension.
Gold - Daily Chart Support and Resistance levels
Resistance: 1180.00, 1200.00, 1208.00, 1220.00, 1235.50, 1255.60
Support: 1140.00, 1130.00, 1120.00, 1100.00, 1080.00
MT4 chart for gold XAUUSDS
MT4 chart for silver XAGUSD
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