Gold expected to touch US$1923 an ounce

Once again we saw bullion crossing the US$1900 mark and touching US$1903 an ounce before
closing at US$1897 an ounce. Thus the metal displayed a positive movement of 0.84%; even
rising above platinum.
As mentioned earlier the main reasons behind this rally is the growing concern over European
debt crisis which is causing investors to doubt the Euro zone’s economic stability and the
slowdown in economic growth in the world’s most powerful country, America, which is
dragging people away from investing their money in equities.
The decelerated growth in the US was evident from the close to zero increase in
employment in the month of August which attracted investors towards bullion as an
investment haven.
Furthermore, the increasing inflation in China which reached 6.5% in July this year, has
forced investors to buy gold for hedging purposes. Moreover, a slowdown in China’s
manufacturing industry was seen in August but with cost increasing further.
Hence all these factors contribute to the increase in gold price, which we expect to touch
US$1923 an ounce; though occasional drop in the metal on reaching high points can be
expected.
Using Fibonacci Retracements we have estimate the following support levels:
S1=US$1796; S2=US$1717; S3=US$1653