Tuesday, April 28, 2015

Gold Trend April 29, 2015

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Long Term ~ Bearish-Need a monthly close above 1800 to confirm the bull market 
final phase underway. Need a monthly close above 1560 to neutralize the trend.
Medium Term ~ Bearish– Need a monthly close above 1255 to remove bearish trend.
Intermediate Term ~ Neutral– trading range 1170-1225.
Short Term ~ Neutral–   Price remains in trade range 1175-1225 and waiting for breakout or breakdown.
Initial Resistance 1212-1222 2nd tier 1228-1231
Support 1189-1195 2nd tier 1178-1183

The last update listed resistance at 1205-1212 and the high was 1215. 
Support was listed at 1189-1195 and the low was 1199.

NEW YORK/LONDON, April 28 (Reuters) - Gold rose 1 percent on Tuesday reaching $1215 intraday after disappointing U.S. data hit the dollar and dampened the streets expectations that the Federal Reserve will hint at this week's policy meeting at an interest rate hike in coming months.
The dollar fell 0.8 percent to an eight-week low against a basket of leading currencies following an unexpectedly weak U.S. consumer confidence report and Traders said this also supported gold prices.
The metal’s 30-day volatility is near the highest in seven weeks as prices are in a very choppy and congested trading range in the 1175-1225 price zone with no clear direction as to which side of the trade that prices will break out from.
In between that price range traders are getting whipsawed as they parse economic reports for clues on when rates will rise and going cross-eyed waiting for more guidance from the Federal Reserve on when policy makers plan to raise interest rates.
Some recent data suggests "the Fed is going to be pushed back longer into a tightening posture," said Eli Tesfaye, senior market strategist for RJO Futures in Chicago.
Recent sluggish economic data from the United States led the market to expect the Fed will probably not act until later in the year.
The statement following the Fed's two-day meeting is scheduled for release on Wednesday.
"Market participants are focusing on the Fed meeting on hopes of some hints on when the Fed will raise interest rates," Commerzbank analyst Daniel Briesemann said. " ... However, I don't think we will get any surprising news tomorrow."
Nevertheless, the Fed will probably try and have it both ways again in their carefully selected wording. And that’s part of the problem as it gets very difficult in discerning just what the Fed will do next.
Will the Fed decide that economic data is too weak to raise rates? Will they slightly change the language in their policy statement? 
Janet Yellen stated after the last meeting that rates may rise as soon as the June meeting. She also hedged her statement by saying that if economic data worsened, the hike could be delayed. 
So far, market participants don’t believe a rate hike will happen anytime soon. Mixed economic data — including low wage growth, slowing GDP growth, and low inflation — will make it difficult for the Fed to justify a rate hike. 
Will that stop them? Who knows. Maybe when they announce their policy decision tomorrow they’ll give us some insight into the future.

Gold Short Term
Resistance on Wednesday will be the 1214-1224 and then 1230-1239.  Support is 1189-1195 and 1178-1183.  With the FOMC results on Wednesday, anything is possible.  We remain in a trade range of 1175-1225.  It's possible a 5th test of 1222 is in play.  Its rare that prices can hold 5 tests without a breakout.  It's not impossible mind you, but it is rare.  Of course in a chop like this we have to take everything with a grain of salt.  The bulls have a slight advantage.
 Gold price chart
We believe the strange sideways trade on the above chart is due to the decision that gold is trying to make on the chart below.  This is what is temporarily creating the mess.  And it extends to the short term cycles as well.  When we get in this kind of chop, indicators do not work reliably.  The bottom line is the market will churn and provide false moves until the next trend finally arrives.   As April comes to an end,  May should provide a respite to this action.

Now lets look at this week. I borrowed this chart but it tells the tale.  The last FOMC meeting was forming a low at the short term cycle and we took full advantage and went long gold at 1159 and sold at 1204.  In silver we went long under 16 and sold at 1724.   The set up on the chart was nice.   Now we have a situation where we had a fake out to the downside and now we have the FOMC results arriving on Wednesday.   As you can see,  this set up requires that for the downside to be FAVORED a close below 1172 has to occur.  In other words there is nothing that can prevent the control boyz from slamming gold down again if they so choose on Wednesday.  On the other hand they can let gold go to the upside just as well.  And that's the problem at the moment.   IS IT WISE TO TAKE A POSITION BEFORE THE FOMC ?   I don't see the Fed really change anything tomorrow.  Does that mean the market charges higher?   It should move higher but in a non trend like this risk is much greater of no follow thru.

Potential support comes in on Wednesday at 1189-1195 and 1199-1205.    Will price spike down towards 1190 and clear the stops?   I don't know.   The question is do i want to go long here near 1205 and have to set a 20 dollar stop ?   The answer is no,  I would rather wait and see and look for a set up to enter at less risk.  

M Samer Al Reifae
Official Representative in Romania at HiWayFX
+40 734 277 757


 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