The lure of $1240 is keeping bears active and buyers out, but there are already so many indicators favouring a turn / bottom that the r/r is likely to swing to the Bulls sooner than most think.
Any catalyst at all here will create quite a major short squeeze.
Whilst a lot of focus was on the diagonal support structures for gold, including a bottom at $1240, I prefer this more technical explanation.
The price has basically completed 3 drives down:
1) 1370 (top) to 1303
retrace to 61.8% line at 1328
2) 1328 to 1284 (1.272% extension)
retrace to 78.6% line at 1317
3) 1317 to 1261 (161.8% extension) = ...
Failure on Friday to move much lower than $1290 and certainly not even challenge the trending support despite the NFP data tells us the bottom is truely in. I think this is now an accumulation zone whilst we await FOMC later in the month. Will slowly trend up until then.
The RSI on this 4hr chart has bottomed, we've seen it touch the channel bottom & I now think we will see a sustained push to break $1363 (black horizontal) which is the present resistance. With USDJPY looking set to head lower the conditions seem likely for a surge during the Asian session once we reopen after the weekend. Stay long to $1363, then buy more at the ...
The above is my non-professional, long term view of gold in logarithmic scale. Given that the metal still seems to be in a phase of indecision, I will have to wait and see how this consolidation resolves before deciding on the likely long-term direction of the gold price.
I like this area for support. Was major area of resistance prior to the recent breakthrough plus the 50DMA has now caught up to this area. Add on that the general political and world uncertainty and I don't think the markets will stray lower for now.
After a clear rally, Gold finally reached the support again. Almost every gold trader has the level of 1,300 on the screen and in this area, there is an enormous number of orders, on the one hand stops for all traders that are already long positioned, but also pending orders for long trades. In addition, the level of 1,300 hits the 38 Fibonacci level. Every ...
Alternative read on this chart to my prior post on Gold is that we have a head and shoulders in play here and the completion of that move would give us a retrace back towards the $1300 area.
RSI is oversold so this isn't my preferred option but is a possibility nevertheless.
I have two favoured short targets here. Either the channel bottom or the 20DMA. Latter needs to catch the price up and form a decent support if we are to see more upside. TP $1320
This squeeze won't go on much longer. The price will move in the next session. I'd guess long, but tbh wait for the break above $1300 and jump on the bus then. Target $1320
It is always worth a look at the gold-silver ratio. Currently, gold is 76 times more expensive than silver (per ounce). In the past, it has been shown that the area above 78 is an extreme area and can be used for trades. In this case, you would sell gold and buy silver.
The chart shows where major support and resistance is, and is there to indicate the trend. On smaller time frames you'll notice that Gold has over the past week firmly stayed at 1275, rather than dipping lower. The fact that this is happening near a turning point in a major downtrend may indicate that this an early signal to get long. If Gold moves above ...
Ok, now that this has broken through the previously strong support at $1215 on Friday the next support levels are plotted here.
There is a horizontal support around the $1195-$1200 area with the latter I think also marketing a phychological barrier potentially. Under this we then meet a longer term support line in the $1180 area.
Gold price is widely followed in financial markets around the world. Gold was the basis of economic capitalism for hundreds of years until the repeal of the Gold standard, which led to the expansion of a fiat currency system in which paper money doesn't have an implied backing with any physical form of monetization. AU is the code for Gold on the Periodic table of elements, and the price above is Gold quoted in US Dollars, which is the common yardstick for measuring the value of Gold across the world.
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COMEX:GC1!
