Gold Trend Aug 01/2013

Long Term ~ Neutral ~ need a monthly close above 1800 to confirm the bull market final phase underway
Medium Term ~ Bearish - Need a close above 1496-1529 to neutralize.
Intermediate Term ~ Bullish– Need to hold above 1280-1292. A close below 1266 would return to bearish mode.
Short Term ~ Bullish – The only question is the next short term cycle due to begin by Friday. It could put a two week high in place. A close above 1354 favors higher. A close below 1308 would return to neutral mode.
Support and Resistance
Initial Resistance 1338-1348 and 2nd tier 1355-1366
Initial Support 1305-1315 and 2nd tier 1280-1292

Gold Hourly Chart

we discussed watching 1338-1342 and the high at 1339 hit the target. On the downside the 1308 and up to 1322 was discussed as important. The low was 1305 and the CLOSE was 1323. Thus both numbers played out as important.

This area on a closing basis in the range of 1308-1322 remains important on the very short Today’s reversal at 1305 has to be construed as bullish. We’re now looking at December gold below and the lower support line was touched today and held. Then the market rallied and closed one dollar above the April crash low of 1322 and at the green 200 hour moving average.

Resistance is the 1339-1342 area and if we get above that then the short term favors higher to the purple Oct 2012 downtrend line at 1355 and up to the upper white line at 1380. While we can’t rule out continued range bound trade in gold, we have to favor that today’s rebound again at 1305 remains bullish.

Watch the 1339-1342 area for resistance. If we get above that, price can move higher into the next short term cycle due August 6th (plus or minus 72 hours). Support is the 1299-1308 area and 1314-1317 area going into Thursday. IF the short term cycle does end up moving lower, then 1272-1282 would be the initial target. The other important level is 1240 but we don’t see moving down there at the moment. With today’s action we have to favor mid week Wednesday may have just provided the low for the week.

What's Next?

We discussed that we could pull back to 1299 last night and got to 1305 on Wednesday. We still have the jobs report on Friday, but the big bounce back up for the close continues to favor the bulls are still in charge.

It’s possible that the sideways action will last until the next short term cycle as the date of August 6th (plus or minus 72 hours) does mean that we could bottom by the August 3rd date which is this Saturday. Since Saturday is closed obviously, if the bulls are still in charge, then Friday or Monday would actually have the window come open for a potential low and subsequent rally into the next cycle due around August 20th.

The other scenario is that we move higher from here into a peak next week. The action on the short term cycles continue to make things very difficult into the right read of the situation.

Regardless of a pullback potential, gold strength remains evident and the physical shortages as highlighted by GoFo and the banks no longer short gold points to one thing and that is the selloff in gold has not quelled physical demand, and now there is a scramble to find more physical gold. It seems that the continued drain in GLD may very well be a way the market is suctioning off real physical gold to meet demands. It is putting in a very potentially bullish scenario going forward in gold. With all the circumstantial evidence each day, it’s hard not to favor that scenario.

A close above 1338 - 1342 favors higher price points.

Even if cycle’s pullback into the 1st week of August, it still seems that the upside has the advantage and that at least a low of a month or two has formed in gold that could push prices into the mid 1400’s before a final pullback later this year.

WITH MID WEEK WEDNESDAY giving us the LOW FOR THE WEEK so far, the potential increases to move higher to week’s end.

Watch th3 1339-1342 area for resistance and last week’s high at 1349 and up to 1355. If we get above 1339-1342 we should see 1349-1355 next with the potential for more.

Bottom Line

With the GoFo readings and more evidence of missing gold and the holding of 1300 on Wednesday, we still have to favor the upside as having the advantage as we go to Thursday. It takes a close below 1311-1317 to begin questioning the short term uptrend. Today’s successful test of the lower boundary and subsequent bounce also favors the uptrend is still intact on the short and intermediate term.

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GOLD CURRENT TRADE 

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Order1 BGT at 1308  stop 1300 On July 31
SL Was Moved to 1314 On Aug 01 
Closed At 1322
Order2 BGT at 1320  stop 1314 On Aug 01
Colsed At 1322

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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