Gold Trend Aug 06/2013

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 neutral mode.
Short Term ~ Bullish – A close above 1331 favors higher. A close below 1265 would return to neutral mode. A close below 1299 also would put short term in question.
Support and Resistance
Initial Resistance 1316-1322 and 2nd tier 1326-1333

Initial Support 1292-1299 and 2nd tier 1270-1282

Gold Overview

GoldTrends notes if the ISM report is real, as we don’t know what is anymore, then gold should find support. If not, then something else is going on. Here’s what came out at 10 am in gold.

10:00 Jul ISM Non-Manufacturing 56.0 vs. consensus 53.1; New Orders 57.7 vs. Jun 50.8

Jun ISM Non-Manufacturing was 52.2

Gold dropped to $1296 before making its low and silver supported as both crawled back up to the end of the day.

According to data released by the Shanghai Gold Exchange, the amount of gold contracts settled for physical delivery on its exchange reached a staggering 1,098 metric tons year-to-date as of the end of June.1.

1,098 tons represents approximately 40% of the entire estimated global gold mine production in 2013. It also represents roughly 1/8th of the US Treasury’s official gold reserves, and over 100% of China’s stated official gold reserves. If the rate of physical delivery on the Shanghai Gold Exchange continues at current levels, it will deliver the equivalent of over 100% of global mine production by the end of this yea all through one exchange. Doesn't sound right but who knows.

Where is all the gold coming from?

Alasdair Macleod’s revelation that as much as 1300 tons of gold seems to have disappeared from the Bank of England’s vault this past spring and early summer. Simply put, it explains how the price of gold has been taken down from its loftier levels to briefly below $1200 at one point and might explain where all the physical gold is coming from.

KEY RESISTANCE and Pivot POINTs for the WEEK

R1 and R2 are 1 and 2 standard deviations of resistance to the pivot point and S1 and S2 are supports of 1 and 2 standard deviation.

Last week’s number was 1343-1351 and the high was 1331.

This week’s number is 1324-1339 and 1351-1371

NOTE – MONTHLY NUMBER NOW REFLECTS JULY COMPLETION. PIVOT IS 1293 AND R1 AT 1379 AND R2 AT 1435. As long as above 1293 on a closing weekly basis, potential is higher. Let’s see what August does.

Gold Hourly Chart

Monday got as high as the green 200 hour moving average at 1320 and then pulled back to support listed last night at 1292-1302 with a 1296 low. As you can see we need to get above 1322 and close above 1331 for higher projections. Note the purple line October downtrend resistance line is at around 1340. That should be resistance if we happen to close back inside the trend channel. The longer we stay out of the channel, the more the potential comes for testing that lower purple channel line which is now at 1270.

Tuesday resistance is 1318-138 and support is 1292-1302. Any pullback to 1270 would also be a key support point that should hold initially. It takes a close below 1266 to put the short term in question. A close above 1326-1331 would be above the green 200 hour moving average and favor a move to first upper resistance at the purple line near 1340.

What's Next?

The question becomes whether the Friday reversal was for real? Regardless, until we get back inside the channel on the hourly chart, and close above 1326-1331, the upside remains somewhat in Jeopardy on the short term.

We got our test on Monday of 1322 (almost --- 1320). That’s the bare minimum we need to exceed and close above --- that green 200 hour moving average and lower white channel line. Tuesday will give one more attempt. The pullback to 1296 on Monday supported. A move below 1292 on Tuesday would continue downside pressure.

The short term cycle is due Aug 6th (plus or minus 72 hours) so it’s not out of the question to probe lower one more time. IF THAT FRIDAY reversal doesn’t hold it’s a bearish sign that would suggest we’re heading towards 1270 and the purple channel line on the hourly chart.

Bottom Line

Good chance we put in a low on Friday, but pullbacks will have to hold near 1290... A close above 1326-1331 would have to favor the bulls are back in charge of the short term but not until then.

 

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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