Thursday, March 10, 2016

Gold Trend March 10, 2016

Long Term ~ Bearish BUT READY TO TURN NEUTRAL- Need two monthly closes above 1322 to FULLY neutralize the trend.
Medium Term ~ Neutral-Need a monthly close above 1255 and for the blue moving average to move above red on weekly chart to turn the medium term trend to bullish. This would be first time since March 22, 2013 when gold was at 1600 and ITS ABOUT TO HAPPEN.
Intermediate Term ~ Bullish– The intermediate term remains in bullish mode and it takes a weekly close below 1180 to neutralize the uptrend.
Short Term ~Neutral- The short term trend has moved to NEUTRAL. Short term cycles call for a potential pullback. ANY CLOSE ABOVE 1272 favors higher. A close above 1287 favors 1306-1322. Any close below 1240 and a pullback should be underway.  Neutral is not bearish --- and gold can still move higher.

Initial Resistance 1263-1272 2nd tier 1280-1288
Support 1217-1227 2nd tier 1200-1210

On a short term basis, the EU monetary policy on Thursday will probably be the key for the week. It’s a mixed bag because if Draghi gives the market what it wants, the Euro will tank but the USD will rally. Perhaps the STIMULUS will overcome and gold will rally. If he doesn’t give stimulus, the Euro will most likely rally and the Dollar lower. Thus this also could be bullish for gold.

Gold Short Term
In our last update we stated it was not impossible for gold to shoot back up to 1265-1275 and since then we did exactly that…moving to 1279 intraday and closing at 1276. Since then however, another pullback attempt is underway. That choppy and overlapping wave could very well be signaling we’re going to pullback towards 1180-1200. First support is the 1222-1232 area. A close below 1240 would suggest a pullback is underway. A close above 1275-1288 means that odds favor gold is moving towards 1306-1322 into the week of March 23rd.
Monthly resistance is 1306-1322 and monthly support is 1162-1189.
Gold Short Term Cycles
The next Cycle is due March 9th (plus or minus 72 hours). Our last update had the odds as moving higher after Feb 25th. Although it has been choppy and overlapping it has continued to move higher since the low was established at 1190. As you can see we’ve been fighting the upper channel line and we almost made it support. We rarely show the medium term cycle because I’m still learning its characteristics. Suffice to say that gold might be putting in some type of high between now and April 9th. We’re just not sure if we’re going to pullback here or get a cycle inversion and keep moving higher into the next BLUE cycle. A close above 1288 will favor we are moving higher towards 1306-1322 into the week of March 23rd. As long as we are BELOW that upper black channel line, then the potential to move lower into the next blue cycle will be in play. Anytime we close above 1272-1288, then we have the potential to move higher. That’s the place to watch in price. Strongest support is at the lower dotted channel line near 1180. The other key spot is near 1222.

What Next?
The EU and DRAGHI will announce monetary policy on Thursday and that should be the KEY mover this week for gold. If they don’t stimulate, gold could drop but if they do stimulate the Euro should drop and the USD should rally. That will make it also questionable as to whether gold can rally more. ANY CLOSE ABOVE 1272-1288 will favor higher to 1306-1322. Any close below around 1240 will favor lower towards 1222 and then we’ll see.
Short term and medium term Cycles are due to turn. The short term cycle is Mar 9th (plus or minus 72 hours) and its possible we will get a pullback over the next 14 days. But beware the medium term cycle window is in play and its also possible that metals could rally into the next blue cycle. If that happens, odds favor the gold rally will be complete and a deeper correction will take place going into May/June.
Any pullback to 1162-1190 would seem to be a gift at the moment in gold.

Bottom Line
Is the final low in gold in place? Perhaps. The two most likely places for the gold low was in (December 2015) or the ideal time of March of 2016 where it will be a Fibonacci 55 months since the gold high in August 2011 took place. So for the low has been December. At the moment we can't rule out another low in March. We would like to see February close above 1255 for the next sign that gold is indeed bottoming.


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