Aug 03
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close)
Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1672. The 1648-1668 area is first medium term resistance.
Intermediate Term= neutral– Need a close above 1625 to favor a key intermediate term low and continue the bullish factor.
Short Term= neutral– The uptrend is bullish and it takes a close below 1575 to turn bearish
Support and Resistance for Friday Initial Resistance for 1603-1613 and 2nd tier 1622-1619 Initial Support 1580-1590 and 2nd tier 1560-1567
RECAP
Markets were pummeled again on Thursday and we have the jobs report on Friday, which doesn’t look good. With 18000 shorts covered over last weekend it’s hard to believe how bad gold got hit. I did not expect it this bad – and thought that 1592 would hold, but the potential to trade down to 1580 is possible. We want to say that should be the extent but this thing is feeding on itself.
Gold very short term chart Gold Hourly Chart
NOTE -- DECEMBER GOLD IS TRADING 4 DOLLARS HIGHER THAN SPOT PRICE. Support is the purple and red line below price at 1609-1613 in December gold on the chart below. Additional support is the 200 hour average at 1603 and then the lower red and purple line at 1590-1595. A failure at that area would bring the uptrend into question. Tomorrow could be a big up day or it could also sell off. We don’t know what to expect. If the bull is intact we should hold the 1600 area. The next support is 1575 – 1580, this area should find support. Resistance is 1600-1608 and then1618.
What Next?
The fed decision was a disaster – and Friday is Jobs re
port. I expect a spike as odds favor a bad report. With today the idea date for cycle turn --- the window will be open on Friday. We’re hoping the 1580 should offer support.
BOTTOM LINE
We’ll favor a bounce after the jobs report.
Aug 02
Aug 01
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1672. The 1648-1668 area is first medium term resistance. Intermediate Term= bullish – Need a close above 1625 to favor a key intermediate term low and continue the bullish factor. Short Term= BULLISH– The uptrend is bullish and it takes a close below 1575 to turn bearish Support and Resistance for Wednesday Initial Resistance for 1629-1641 and 2nd tier 1655-1665 Initial Support 1606-1609 and 2nd tier 1595-1601
RECAP
The market gets ready for the Fed decision on Wednesday and the ECB bankers meet on Thursday. Price can go either way in this decision point.
What Next? It comes down to the FED decision on Wednesday and what the ECB will offer on Thursday. With short term cycles due this week we have three scenarios. We still think the uptrend has the upper hand. BOTTOM LINE We’ll favor higher as long as price is above the 1595-1605 area. We could very well spike on Wednesday once the Fed decision is made to clear the stops. Anything goes on Wednesday.
July 31
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1672. The 1648-1668 area is first medium term resistance. Intermediate Term= bullish – Need a close above 1625 to favor a key intermediate term low and continue the bullish factor. Short Term= BULLISH – The uptrend is bullish and it takes a close below 1575 to turn bearish Support and Resistance for Tuesday Initial Resistance for 1629-1641 and 2nd tier 1655-1665 Initial Support 1606-1609 and 2nd tier 1595-1601 RECAP the gold market waffled around both sides of unchanged today and but it really was an indecisive day. In addition to practically unchanged US equities, the gold market was also pressured by increased concern toward Spanish debt just ahead of the European Monday closes. While some physical commodity markets were undermined by the softer than expected Dallas Fed business activity decline, some traders suggested that gold actually drafted some support from the data flows today because some data might have served to increase US easing prospects. Offsetting the soft headline reading from the Dallas Fed Business activity report were gains in the headline component of the Chicago Fed Midwest manufacturing index. It is also possible that gains in certain sub indices within the Dallas Fed report served to countervail the evidence of slowing from this morning's data. The gold market was also undermined by minor weakness in the Euro, which was a bit lower than the Friday session. By day’s end the bull’s had to be somewhat happy with the capacity to crawl back into positive ground in the face of renewed slowing fears, adverse currency market action and weakness in copper and energy prices. In other words, the markets were presented with fresh slowing fears and that served to weigh on some industrial commodity markets. However, it is possible that gold managed to spin weak economics into a positive because of the upcoming central bank policy meetings. A number of analysts and brokerage firms think that gold is heavily dependent on fresh easing in order to rally and therefore some traders might be expecting a critical reaction in gold prices later this week. With the Fed meeting beginning on Tuesday and a whole lot of reports on Tuesday, it could be an interesting day. We have THE FED MEETING, Store sales, Personal income and outlays, Employment cost index, Redbook, S&P Case-Shiller Housing, Chicago PMI, and consumer confidence. Gold very short term chart Gold managed to hold the RED line on the lows on Monday. On our trade signals page, we missed going long on a mini contract by just 40 cents. Price so far is supporting on this purple and red line but we have to admit the pattern is a bit choppy but it doesn’t want to let go. If there is to be a pullback this week – the 1594-1605 support areas would be where we would most likely the pullback low. At the moment, it almost looks like it would be a gift. With the FED meeting beginning on Tuesday and a whole bunch of economic data, it could be an interesting day. Especially when we consider that it’s the last day of the month and JULY has a knack in the past of providing big moves up. We’re not sure if that will happen, but we’re mentioning it. For now, we have to favor higher as the odds favorite on Tuesday. If we do get a pullback to support at 1594-1605 we think it would be the maximum downside. 
INVERSION SCENARIO's SCENARIO 1 POTENTIAL TO PEAK JULY 30th--- MOVE LOWER THIS WEEK --- AND MAKE THE LOW ON THE BLUE CYCLE ---- then move higher two more weeks. The window for the blue cycle is Aug 2nd (Plus or minus 72 hours) ---thus the window for a cycle turn begins on Tuesday July 30th and will be open for the entire week. This scenario calls for a low this week and then a resumption of the upside. SCENARIO 2 The market keeps rallying until the middle of the month near August 16th and then begins a pullback to the end of August. SCENARIO 3 The market peaks this week and begins a pullback to mid-month. This scenario keeps the potential bear market still in play and no inversion takes place. In summary, we think the correction is over in the metals but we need to get confirmation on our cycles and the medium term moving averages. This coming cycle is a tricky one. The potential to pullback to 1585-1600 is possible, but so is the potential to move higher.
What Next?
We’ve noticed a pattern of strong days on July 31st in the past. Last year was a 50 dollar move. We have no idea what causes this or whether it will repeat this year, but we wanted to mention it. With the Fed meeting beginning on Tuesday and a whole lot of reports on Tuesday, it could be an interesting day. We have THE FED MEETING, Store sales, Personal income and outlays, Employment cost index, Redbook, S&P Case-Shiller Housing, Chicago PMI, and consumer confidence. We still need to watch the short term cycles --- but we’re not sure how they’re going to play out this time around. THE AUGUST contract needs to be rolled over to the OCTOBER as there is only 1 trade day left in AUGUST. Our support of 1614 listed last night held with the mini at 1614.40 and the maxi at 1615. That area1614 ---- and the 1605 area are the two potential points to watch this week.
BOTTOM LINE
The potential for a pullback this week is in play, especially if we start trading below 1614. The Monday pattern if anything still allows for a pullback. With the FED meeting beginning on Tuesday and lots of DATA for USA on Tuesday, can go either way. Price has been holding the purple channel line at 1620 but the pattern has gone choppy since Friday. We need to remain cautious and if a pullback to 1605 does develop, it might be a nice place to buy this week. The other side of the coin is that scenario we mentioned that the last day of July has in the past given big moves higher. Last year we saw a 50 dollar higher move. BUT the FED meeting may indeed curtail it. We mention it as a curiosity – we are not sure how to play or if it should be played. Finally, the short term cycle is due for a top this week. Even here, we have a potential breakout in gold and we can’t eliminate any of the 3 scenarios’s we’ve listed for this event. With price moving above and below the purple channel line, it makes even this a tuff nut to crack as to which way price will evolve on Tuesday. We’ll favor higher as long as price is above 1612-1614 in August gold. Be aware that we can trade down to 1605, where the next purple channel line resides. The trend is up, but with everything going on, and with all the reports on Tuesday morning, if there is to be a big rise in price, it will most likely transpire from there. Be ready.
July 30
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1672. The 1648-1668 area is first medium term resistance. Intermediate Term= bullish – Need a close above 1625 to favor a key intermediate term low and continue the bullish factor. Short Term= BULLISH– The uptrend is bullish and it takes a close below 1567 to turn bearish Support and Resistance for Monday Initial Resistance for 1628-1634 and 2nd tier 1645-1655 Initial Support 1606-1609 and 2nd tier 1595-1601
RECAP
Gold had a significant rally last week and peaked at the 2nd tier resistance points on the weekly update. We called for the correction to be over last week when price was 1575-1580 and we called for a move to 1625-1630 as the first point. With the 1628 high, we have reached the first point where gold is going to have to prove itself. While we have called for the correction to be over, what we need to see now is confirmation of that call with the short term cycles and the medium term moving averages. In short, we need to see the gold price lows return to taking place on the blue cycle and we need to see price close above the 34 week moving averages in a range of 1648-1668 area. So there is still work to be done from a confirmation standpoint.
What Next?
Odds favor the bull market has resumed, but we still need to see cycles align with the blue cycle giving us the lows and we still need to see the 34 week moving averages taken out. THE AUGUST contract needs to be rolled over to the OCTOBER as there is only 2 trade days left in AUGUST. With the FED meeting this week and with the short term cycle window opening on Monday, the potential for a pullback will be in play after this 70 dollar run from the lows last week. With that said, the move so far is pretty strong. RESISTANCE runs from about 1629 to 1639 on Monday. Support is 1614-1619 and then 1600-1608. BOTTOM LINE The potential for a pullback this week is in play, especially if we start trading below 1614. We’ll have to see how the pattern looks as we trade on Monday. With the FED and the rollover from August to October, we could see weaker price to begin the week.
Gold Weekly Fundamental Analysis July 30- Aug 3, 2012, Forecast
Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets.
- Gold reacts to uncertainty in the markets
- Gold reacts to the Federal Reserve and monetary policy
- A drop in major currencies can indicate a run into gold.
- Remember investors tend to take profit from gold so watch for trading opportunities when investors are taking profits, not moving out of the markets.
Gold had the best week it has seen in months, trading as high as 1628.55 to end the week at 1622.25.
One reason funds may feel comfortable about increasing exposure to Gold is they are concerned that the dollar may weaken during the US election campaign. With the US deficit and high debt likely to become important election issues in the US Presidential campaign, we would not be surprised if the dollar came under pressure.
The stand-off over the deficit ceiling last summer weakened the dollar and the same may be about to happen again as the US faces a ‘fiscal cliff’. Congress now has a choice: they can either let current policy come into play that would see the Bush era tax cuts expire at the end of the year and see automatic spending cuts introduced to prevent the debt ceiling from rising, or they could vote to delay the implementation of the new policy, or change it. The former is likely to hit economic growth, the latter is likely to add to the deficit. Although all eyes are on Europe at present, we expect the US election will soon also come into focus.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
