September 21, 2011
We expect gold prices to trade within a limited range on Wednesday, albeit with an upside bias, as traders will be eyeing how the Fed will react to the recent slowdown in economic activities. Moreover, the EU debt crisis is likely to continue providing gold prices with bullish momentum, however, the focus will be the FOMC meeting on Wednesday.
Gold Turns Lower, Dollar Climbs After Fed Meeting
Gold turned lower and the U.S. dollar rallied after the Federal Reserve announced plans to extend the average maturity of its holdings of U.S. Treasuries, also known as Operation Twist.
Gold futures – per the December 2011 contract – slid from as high as $1,818 to as low as $1,782 following the FOMC announcement, and remained lower by $17.80, or 1.0%, at $1,791.30 per ounce as of 2:59pm ET.
Gold equities relinquished their gains alongside the yellow metal, with the Market Vectors Gold Miners ETF (GDX) unchanged at $65.63 per share.
Silver pared its gains considerably this afternoon, as it retreated from an intra-day high of $40.77 to trade higher by just 0.1% at $40.19 per ounce.
The U.S. Dollar Index, a trade-weighted measure of the greenback versus several of the world’s other leading currencies, climbed from negative territory on the day near 76.80 to as high as 77.33. The euro gave up its modest gains against the dollar as it slid 0.2% to 1.3673 this afternoon.
The broader equity markets headed south as well, with the Dow Jones Industrial Average (DJIA) lower by 98.47 points, or 0.9%, at 11,310.19.
Lower gold prices should follow rising stock markets, though the Federal Open Market Committee meeting is drawing interest.
Gold is getting a boost of about 1.4% as the market turns its focus onto the FOMC two-day policy meeting starting today. Should the Fed announce an additional aggressive stimulus, the demand for gold as a safe haven may continue.
From a technical picture, the chart suggest a double top a little less than $1,930 a troy ounce with three separate bearish candle formations occurring with double top. Definitive moves are expected once the Fed releases its statement at
If the FOMC is statement is weak, look for prices near support between $1,710 and $1,745.
Gold is getting a boost of about 1.4% as the market turns its focus onto the FOMC two-day policy meeting starting today. Should the Fed announce an additional aggressive stimulus, the demand for gold as a safe haven may continue.
From a technical picture, the chart suggest a double top a little less than $1,930 a troy ounce with three separate bearish candle formations occurring with double top. Definitive moves are expected once the Fed releases its statement at
The end of the meeting on Wednesday at 2:15 Washington time.
Support can be found between $1,710 and $1,745, with resistance found by drawing a trend line from the right side double top on Sept. 6 down to around the tops of the candle sticks to most recent candle, providing a resistance level around $1,808.If the FOMC is statement is weak, look for prices near support between $1,710 and $1,745.
Gold prices gained on Tuesday amid renewed concerns from the European debt crisis after rating agency Standard & Poor’s downgraded Italy’s credit rating, which boosted demand for gold as a safe haven, however, gains were limited as traders remained cautious ahead of the FOMC meeting, where expectations signal that the FOMC will announce more monetary easing, although traders are still speculating whether the FOMC will announce QE3 or an Operation Twist.
We expect gold prices to trade within a limited range on Wednesday, albeit with an upside bias, as traders will be eyeing how the Fed will react to the recent slowdown in economic activities. Moreover, the EU debt crisis is likely to continue providing gold prices with bullish momentum, however, the focus will be the FOMC meeting on Wednesday.
Scenario for today
Elliott: flat correction up 1819.51
It should be subject to more sell off towards 1786.90 or 1778.68. Corrective upward swings should face resistance around 1829.23 area. A break of 1836.55 is bullish.
The gold markets bounced nicely from the $1,750 support level on Tuesday as traders continue to worry about situations in the problems in Europe. The gold markets are one of the last “safe haven” area out there, so when times get tough, traders will run back into the gold markets. The area was the right place for a bounce, and that is exactly what we suspected would happen. The market looks like it wants to rise back into the consolidation zone, which means it could run as high as $1,900 an ounce from here. We are not selling this market at all.
September 20, 2011
The long bearish bar that took the metal from 1811.00 levels to areas below 1785.00 zones signaled that yesterday's caught breakout above the falling wedge pattern was a false breakout. We have three major technical factors that prevent us from suggesting possible bearish resumption as follows:
1. The metal is very close to the important Fibonacci level of 76.4% for the upside rally from 1702.00 to all-time high of 1920.00.
2. RSI 14 is very close to oversold areas.
3. The proposed Elliott sequence is still valid as 1702.00 provides floor for the IM wave.
2. RSI 14 is very close to oversold areas.
3. The proposed Elliott sequence is still valid as 1702.00 provides floor for the IM wave.
Therefore, it is better to stay aside until clearer signs appear to pinpoint the upcoming big move.
The trading range for today is among the key support at 1702.00 and key resistance now at 1855.00.
The general trend over the short term basis is to the upside targeting 1694.00 per ounce as far as areas of 1430.00 remain intact with weekly closing.
Support: 1761.00, 1755.00, 1745.00, 1728.00, 1715.00
Resistance: 1785.00, 1800.00, 1807.00, 1815.00, 1825.00
Resistance: 1785.00, 1800.00, 1807.00, 1815.00, 1825.00
Recommendation Based on the charts and explanations above our opinion is staying aside until an actionable setup presents itself to define the upcoming big move
September 19, 2011
Gold's recovery was limited by 4 hours 55 EMA and weakens again today. Choppy fall from 1923.7 is still in progress and might extend low. Nonetheless, such fall is treats as either consolidation to rise from 1705.4 or the third leg of the consolidation pattern from 1917.9. In either case, we'd expect strong support above 1705.4 to contain downside and bring up trend resumption. Above 1923.7 should in turn send gold towards 61.8% projection of 1478.3 to 1917.9 from 1705.4 at 1977.1.
In the bigger picture, firstly, gold's long term up trend is still intact and there is no signal of reversal yet. Another record high should still be seen. But we'll be cautious on another near term reversal near to 2000 psychological level and finally bring some lengthier consolidation. Meanwhile, a break of 1705.4 will argue that gold has indeed topped out with a double top reversal pattern (1917.9, 1923.7) and in such case, deeper pull back could be seen back towards resistance turned 1577.4 support instead.
Comex Gold Continuous Contract 4 Hours Chart
Gold - Rebel without a Pause ?
The gold market has been on Fire but the September Seasonal has not followed thru so far. Is there a case for a pause and consolidation for Gold ? If you scroll down on this page to the seasonal section -- you'll notice we listed September as the strongest month of the year on average. However -- Note that we did list that the rally in July/August had us concerned to some extent about September.
While we are so used to seeing higher prices -- we need to keep this in mind. This bull market would be acting PERFECTLY NORMAL if we were to get a correction or at least some consolidation and sideways activity. The chart below shows the move from the Crash low. A pause here would be NORMAL. In fact -- the last time we had an Oct/November low in gold was during the last CRISIS in 2008. It was exactly three years to the day when the central banks intervened last week that the Lehman Crisis came to fruition.
There are a few other clues. RSI is on the verge of only its 4th drop below the 70 area. The past three drops were all during a price pullback that lasted a few months. The other thing that is particularly interesting --- is all of the corrections since 2010 were on HIGH VOLUME SPIKES. THere were two major spikes recently --- each time the 1900 level was hit. While everyone is fully bullish ----- and rightfully so --- the price chart says that a pause in the upside here between the 1700-1900 would be a NORMAL OCCURANCE. In fact --- the 34 week average usually gets hit every year just around February. The current price for the 34 week average --------------------is 1548. Even the 13 week moving average is below 1700.
The upcoming week is usually higher ---- but it may be just a retracement to the 1850-1880 area. The key point is this --- the bull market is not over ---- and if you believe nothing has changed ---- then a pullback and correction would mean just that on the long term charts. NOTHING HAS CHANGED. It will be normal if we pullback.
The longer term weekly chart also shows a major channel high may have taken place. Can the market go above this line? Of course it can. We are dealing with odds and not absolutes. However ---- odds do favor this is the normal place for gold to take a pause.
