FxWirePro: Gold Outlook: target $1140 reached, next target $1230/troy ounce

Gold has reached our target on the call - Buy gold @1090 and at dips of every $10, with target around $1140 area and stop los around $1050 area.

It has reached target and beyond. Last time we expected gold to regain some of its lost charm after FED hike is done with in December. In addition to that, Gold has started responding to risk aversion somewhat, but Dollar hasn't started weakening as we had expected, broadly but until recently.

With recent change in Dollar outlook, and persisting risk aversion we expect Dollar to lose more and broadly. Even if Obama Dollar rally has much to gain from here, Dollar has long been due a significant correction and we might very well be to that tipping point.

Under such outlook we expect Gold to gain further and extend on our initial target to next around $1230/troy ounce.

Technically speaking, Gold has been trading in a downward sloping channel since April, 2013. So $1230/target would mean it breaks above the ceiling of the channel. So we would be very cautious over two points -

• Once it reaches ceiling around $1200 and
• Once it reaches target on momentum, there could be possibility of false breakout.

Gold is currently trading at $1157/troy ounce.

Gold could represent opportunity to dips buy if NFP comes better than expected.