Gold has surged higher today, breaking through resistance first at 1300 then at 1322-1325. However, there is still a raft of resistance above to contend with and the market remains in a powerful down trend.
Next resistance comes in at the 50 DMA at 1334, then the 1338-1342 resistance zone. Above this, we find further resistance at 1350-1360.
It is clear the gold is being given a boost by a weakening dollar, though we expect the up trend in the dollar to resume shortly. The dollar has now retraced 61.8% of the recent rally to 85 and this should provide support for a resumption of the up trend.
Equities remain in a strong up trend and, as we have said many times before, a sustained rally in gold back towards 1500 and beyond will not unfold until we see a meaningful correction in equities. This does not look likely from where we are at the moment.
We have re-opened our short position after being stopped out today, such is the strength of our conviction that gold is headed lower again soon. We have placed our stop loss at 1363 - above all of the above resistance levels.
As we mentioned in our video this morning, the only signs of caution we see are the RSI on the daily chart rising above the 50 level that has capped the market since the April sell off and the break out of the first down trend channel around 1300. However, on balance, the downside still outweighs the upside considerably.
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GOLD CURRENT TRADE
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SHORT
Oct Gold At 1337.50
Stop 1363.50 On July 22/2013
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GOLD CURRENT TRADE
==============================================
SHORT
Oct Gold At 1337.50
Stop 1363.50 On July 22/2013
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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.
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.
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
