Rangold Resources Open to Gold Fixing Alternative; GOLD Turning Bearish

by on May 26, 2014 9:20 am BST

Rangold Resources Ltd. (GOLD) has used the now-infamous London gold fixing for nearly two decades and is open to gold pricing alternatives as a benchmark for the gold markets.

Mark Bristow, Rangold’s chief executive officer, said “the nice thing about the gold fixing is that it takes into account the market. It’s a logical process.” However, regulators have come to the conclusion that the century-old method is highly flawed and open to manipulation.

Just last week, the Financial Conduct Authority (FCA) fined Barclays – a gold fixing member bank – £26 million because of one trader’s rouge effort to exploit a weakness in the system which cost clients significant losses. Bristow added “there is always no harm in reviewing any business,” while hinting that the Comex gold closing price on the Chicago Mercantile Exchange (CME) futures exchange as a benchmark could be a possibility. It would then move from a flawed fixing of conflict of interest to move demand and speculative nature.

GOLD has been trading to ascending support within a triangle, signaling a bearish move is in the works. Gold prices and current risk-on sentiment has not worked out for miners in recent months, even though gold and gold miners hold positive gains year-to-date. GOLD, itself, is trading lower from yearly highs.

A close below support at $74.80 will open up bearish continuation to $72.16, while demand at support could provide a pullback to $77.13. However, there is currently a bearish 20/50 EMA crossover with the 20 EMA looking to dip below the 72 EMA. This should provide the momentum to technically break through support.

1D Chart of GOLD

1D Chart of GOLD