September 09, 2011
Gold closes a wild week with a high of 1923 -- a low of 1793 -- and a close of 1855....
right in the middle of the wide range...
The gold market suffered a hard hit again for the second time in three weeks at the upper panic line. This current drop seems like more major manipulation and intervention by the central banks and G-7 Governments. This time Gold dropped 120 dollars in 24 hours but the det crisis in Europe continues to develop and markets are gyrating wildly as money looks for a place that is safe. At the moment it seems that the market is using the upper green panic line as their sell point. Going into next week the support area is near the 1700 area and resistance is the 1920-1970 zone. The short term outlook is a very mixed picture.
September 08, 2011
The gold markets fell on Wednesday as traders around the world decided to take on more risk in the various stock markets in reaction to the German high court allowing the bailout of Greece to continue. The pullback has been significant, falling as much as $60 at one point. The other thing to be aware of is the double top we formed at the $1,920 mark. Until this gets broken, we cannot suggest buying as this is starting to look more and more like a top of sorts.
Granted, it isn’t the top for good – rather for just a while. The market is way overbought, and this market has a tendency to shake out the late traders which are almost always chasing performance. The area we like is the $1,700 area, and slightly higher. We feel this pullback has been a long time coming, and that it is vitally necessary for the long-term growth of gold to continue. We don’t sell we just wait for gold to go on sale.
Granted, it isn’t the top for good – rather for just a while. The market is way overbought, and this market has a tendency to shake out the late traders which are almost always chasing performance. The area we like is the $1,700 area, and slightly higher. We feel this pullback has been a long time coming, and that it is vitally necessary for the long-term growth of gold to continue. We don’t sell we just wait for gold to go on sale.
If we get a break of the double top pattern, we might be forced to buy at that point as well.
Why did I forecast a top in Gold then? Why did Gold rally back to new highs recently? Is the Gold Bull Market now over? Let's see if I can answer those questions with some level of logic below.
I had forecasted a major correction because Gold has had a run of 34 Fibonacci months from October 2008 to August of 2011 from $681 to $1910 per ounce spot price in US dollars. That type of pattern was formed with a clear 5 wave move, with obvious corrections along the way. The reason I was confident of a major correction was due to the confluences of the 34 months of time, the price relations to prior rallies and corrections, and the Fibonacci sequences coupled with the sentiment and cover stories on Gold in major publications. Gold should have entered into a multi-month correction that will consolidate that 34 month move, and the first shot across the bow was the $208 drop in 3 days.
Interestingly, that $208 drop over 3 days corrected 50% of the 8 week move from $1480 to $1910. As we can see markets move very very fast these days and can whipsaw even the best of traders. I told my subscribers to cover their short bets at $1724 spot, and since then we rallied to $1920 this week before topping again.
The reason Gold rallied back and touched the old highs and then some was due to the German Court pending decision regarding the constitutionality of backing the Eurozone countries with bailout funds. Today we had a positive decision by the court denying claims that the bailouts were unconstitutional. Had the German Court ruled the other way, we would have seen Gold spike to $2000 and the SP 500 and European Bourses tank hard. So if you were getting long Gold on this recent rally, you were taking on a lot of short term headline risk and I told my subscribers it was best to stand aside until we got the ruling.
Now that the ruling came out, Gold has topped at 1920 in what typically traders would call a 'Double Top' pattern, but it's more involved than that. In the work I do, we call it an 'Irregular correction ' pattern, where the retracement of the $208 decline runs all the way back up and past where the decline began at $1910. These are very rare patterns and again, I believe exacerbated by the Eurozone issues as they hinged short term on the German decision. What we should see now is what I call a 'C WAVE' to the downside, with targets typically at $1620 relative to the rally from $681 to $1910 over 34 months. A drop of $290 is only 15% from the highs and would fill in gaps in the Gold chart.
Will Gold drop that low? The fundamentals for Gold are screamingly bullish, but the entire world knows that and it may be priced in for a while. Gold should consolidate those topping highs for a while to let the fundamentals catch up the price action in Gold which ran ahead of them and then some. The Gold bull market should run for 13 Fibonacci years, and I have been bullish since November 2001. I understand the fundamentals are very strong for Gold, so please don't miss-read my comments ore forecast. I use crowd behavior and psychology to help pinpoint major tops and bottoms, and right now we should have some more work to the downside to correct sentiment in Gold and then allow for the base building period before the next leg up towards the highs in 2014.
Gold prices tumbled on Wednesday amid rising optimism around global financial markets, where traders were optimistic after Italy announced new austerity measures, which provided stock markets in Europe and the United States with strong bullish momentum, and accordingly, traders opted to invest in higher yielding and more risky assets, which put strong negative pressure on gold prices one day after rising to a new record high on Tuesday.
September 07, 2011
As shown above on the chart, gold declined sharply since the morning. Nevertheless, this decline didn’t confirm that the bullish impulsive wave has ended, which represents the fifth wave of the suggested scenario. The metal could be trading within the minor fourth wave of the fifth general wave, while after the current downside correction should end, the metal might rebound to the upside again; however, we remain neutral today, awaiting the completion of the current downside correctional movement.
The trading range for today is among the key support at 1772.00 and key resistance now at 1920.00
The short-term trend is to the upside targeting 1945.00 as far as areas of 1475.00 remain intact
Support: 1835.00, 1825.00, 1815.00, 1800.00, 1777.00
Resistance: 1845.00, 1855.00, 1867.00, 1879.00, 1900.00
Resistance: 1845.00, 1855.00, 1867.00, 1879.00, 1900.00
Recommendation Based on the charts and explanations above, we remain neutral today awaiting more confirmations
Gold markets had a wild day on Tuesday as traders bought, sold, bought, and then sold again in the session. The $1,900 level is acting as a temporary ceiling in this market, and this struggle isn’t overly surprising. The resulting candle does look like a hammer of sorts, and the bottom of it touched the $1,850 area, and area that we identified as support. A breaking of the highs on Tuesday sends this market back up. If we get pullbacks, we are looking for support near the $1,800 level as well.
Gold first support on Wednesday is the 1845-1855 area.....
Gold reached 1920 on Tuesday moring and the upper green panic line for the 2nd time. The first reaction at that upper line produced a 200 dollar drop. So far, gold has now pulled back 60 dollars since today's high. The potential that gold could begin a pullback to mid month September is gaining credibility. Part of the problem once again is that the 60 dollar selloff in gold just happened to come about 5 minutes before the Swiss National Bank announced that the would put a full intervention on and not allow the Euro to drop below the 1.20 level. Once again it looks like a fully coordinated effort by the central banks to intervene at a position on the chart where price is capable of really escalating.
The Swiss National Bank made good on persistent market rumours that it was planning to peg the SFr to the Euro in order to halt the dramatic appreciation of the currency which has been hurting the Swiss economy.
The announcement of a minimum EURCHF level at 1.200 nevertheless took the market by surprise coming after a couple of days where the SFr has been strengthening again towards 1.10 Euro.
With one more “safe haven” now literally removed investors will look to gold as the last man standing which also means that a kneejerk reaction down to 1,862 following the announcement quickly attracted buyers who took it back up to 1,915.
Whether this will accelerate the appreciation of Gold, which currently is heading for its best year since 1979, remains to be seen. Investor interest has been falling over the last month despite new highs being reached with total gold holdings in long futures bets and exchange traded funds having dropped by 251 metric tonnes to 2,865 tonnes.
Worries about further margin increases on gold futures, which could force hedge funds to reduce exposure even further, combined with sellers who need to off-set losses on other investments could play its part although the fundamental reasons behind the month-long rally remain.
Gold has the potential to reach 1,970 over the coming months but after the recent 200+ correction short-term traders will be more inclined to book profits faster than before. This might slow down the ongoing rally but it won't stop it.
September 06, 2011
Gold moves into Tuesday morning above 1900 dollars. The upper green resistance line is just above in the 1930-1970 area!!!!
In line with our positive anticipation, gold is hitting new historical highs while we are writing these lines. The IM -impulsive- nature of the current wave of the suggested Elliott count continues pushing the pair higher. Our previous defined technical target of 1945.00 is under our technical microscope and breaching through it will bring panic buying pressure towards the psychological level of 2000.00. RSI 14 might cause fluctuation before achieving more upside actions. Our constructive bullish outlook is supported by the breakout above H 4 –long breakout- of camarilla studies as seen on the secondary image.
The trading range for today is among the key support at 1855.00 and key resistance now at 1945.00.
The general trend over the short term basis is to the upside targeting 1945.00 per ounce as far as areas of 1475.00 remain intact with weekly closing.
Support: 1912.00, 1900.00, 1888.00, 1872.00, 1867.00
Resistance: 1920.00, 1927.00, 1935.00, 1945.00, 1950.00
Resistance: 1920.00, 1927.00, 1935.00, 1945.00, 1950.00
Recommendation Our opinion is, buying gold around 1905.00 targeting 1945.00 and stop loss below 1879.00 might be appropriate.
Gold fluctuated heavily on Monday with the start of a new week, yet generally was still biased to the upside as losses were broadly seen across markets with Asia starting the week with reaction to the weak jobs report from the United States and Europe battered by the pessimism and deepening debt crisis.
The debt woes in Europe and fears of another recession, especially in the United States, kept demand on gold as a haven evident, though was affected by the strong dollar and the fear of the high levels for the metal as investors start to feel the bubble burst for gold.
The volatility is expected to prevail on Tuesday especially after gold stretched for a new historic high above $1,900 per ounce which will keep choppy and volatile trading evident.
Investors from the United States and Canada will return from a long Labor Day weekend and the volume will return to the market and the sentiment will remain predominant with haven demand still supporting the metal to the upside.
September 05, 2011
Gold prices extended the gains last week, as concerns over the outlook for global growth and rising fears that the US economy is losing more momentum, which spread pessimism across global financial markets and increased demand for safe assets, which boosted gold prices and sent them above $1875 an ounce.
Concerns over the outlook for global growth intensified last week after data from the United States signaled the economic recovery was losing pace, where data from the housing, labor, and manufacturing sectors signaled economic activities continued to slowdown, which spread a huge wave of pessimism over the outlook for growth in the world’s largest economy.
Gold prices are most likely to continue their bullish trend over the coming period, especially since the level of uncertainty remains unusually high, as beyond the debt crisis in Europe, the uncertainty surrounding the outlook for global growth is also very high, and that should further boost demand for safe havens including gold.
Important data will be released next week from the United States, where the ISM Services will be released for the month of August, and expectations signal that economic growth slowed down further, and should that prove to be right, we expect gold prices to extend the rally next week.
Gold price seems to have defied the head and shoulders drop hasn’t it Perhaps the fundamental news of a QE3 happening and Goldman Sachs already anticipating one to happen. Whatever the case, the indicators for gold seem to be bullish. Going long seems to be a better option. Market bears should not short until a certain condition is met.
Gold has a very strong bullish rise which is seen to be bouncing predominantly on the 0.382 mark which shows a rapid move up. Chances of it going up to the 1.618 extension and even beyond is rather high. Perhaps a nice take profit position would be at the 1.618 mark or slightly higher at 1855-1865. Stop lost should be placed perhaps at the 1800 psychological level.
Now that signs look very bullish for gold even after the big drop. Remember that time constantly moves on and trend lines are always shifting. It now looks still bullish even now. However a short term trend reversal might happen if the inner trend line is breached at 1800-1805 level. If it does a bearish phase might occur.
Fundamentally gold price should be supported by the fact a QE3 is looming. If it does happen, expect gold to drop a bit then skyrocket a little.
