Gold Trend 14/March/2013

Long Term=Bullish - major yearly resistance 1792-1804 needs to be exceeded on a monthly bass and close above 1840 to resume long term up bull trend.
Medium Term=Neutral - It takes a weekly close above 1694 to turn the trend back to bullish. Resistance 1755-1765(Oct/Nov 2012 Resistance) Support 1500-1550.
Intermediate Term= Bearish--it takes a close above 1612 for neutral and 1627 for bullish.
Short Term=Neutral --- Need a close above 1599 for Bullish and close below 1555 for full bearish.   A close above 1610 would favor 1619-1627
Support and Resistance
(APRILGOLD – Use same number for spot)
Initial Resistance 1589-1599-and 2nd tier 1610-1619
Initial Support 1578-1585 and 2nd tier 1560-1567

Stronger than expected Retail figures from the US put gold under pressure yesterday, after a positive start in the Asia and UK sessions.  The market fell to 1585 before finding support – it looks to us like a good battle is shaping up in this area as the longer-term down-trend tries to hold out against the recently formed up-trend.

At the moment it’s looking quite positive for the bulls as in the past few days there has been some overwhelmingly gold-negative news which should have seen prices fall away sharply, but each time gold has bounced back and as it continues to do so the more it looks like a bottom has formed and we should be expecting a return to higher prices.

A move above the 20-day moving average and a break beyond 1600 should see us approach 1620 quite quickly, beyond that we’d expect resistance at 1635 and 1655.

For the bears, if 1585 gives way there is more support at 1570-75 and again at 1554.  If prices drop below 1554 we’d expect a retest of the 1525 low from May last year.

Spot gold chart published few days ago showed resistance 
line that held gold & now lower line tested today at 1575

Gold Hourly Chart

Gold broke out higher on the hourly chart and ran up exactly to our resistance line for the 2nd day in a row. Support is the 1578-1585 area at the green 200 hour moving average and the gold dotted line near 1585.  2nd level support is now the Gold trend line at the 1560-1563 zone.  As long as we hold 1578-1583 the upside can come in play. More important now is exceeding t that resistance line at 1598-1600.  That would open the door to the 1610 area next with the potential for more.  We have many a one day wonder and while mid week Wednesday made a new high by 1 dollar we still need the follow thru above 1600.

 It’s been a very choppy and overlapping pattern and that usually spells trouble.  That’s why we need to see more than just a move to first resistance but some follow thru to break this one day wonder pattern. The key is that GOLD is trying to transition from its gold downtrend channel to an UPTREND channel.  The intersection point is right at that 1598 area that price is trying to get above. IF we break below 1578 then odds favor we’re still in the downtrend channel.  IF we break 1600 and hold then the potential to enter an uptrend channel will come into play.  Whichever cycle is chosen will also choose the channel that we end up moving in.

What Next?

We’ve gotten a push over the last two days to first resistance at 1598. Mid week Wednesday provided the high by 1 dollar for the week so far.  Short term cycles are in the transition “window” until the close of Friday trade and whatever direction we take next week should set the pace until the latter portion of March.  Both days saw 1598 get hit for a high and both days have come back to test 1st level support.  Thursday is doing the same so far. Nothing has yet been decided on the next short term trend.  We’re either seeing the high take place of the ending cycle or the new one has begun.  We don’t know which is which just yet.  If we break below 1575 on Thursday we should see the 15558-1564 area and if that gives way then odds favor lower to the 1520-1542 area. The trend remains neutral as we’ve been in a tight zone since March began.  The next two week cycle should be in play by Monday if it isn’t already.  A close above 1598 should be viewed as short term bullish and projects the 1610-1620 area.   Thursday should test the support on gold in the 1578-1585 area and it’s probably that area needs to hold if we are in fact transitioning to an uptrend channel as we discussed on the hourly chart.

Bottom Line

we favored another test of 1598 for Wednesday and that’s what we got. Thursday favors the lower end test of 1578-1585 and if that can hold another probe into the 1590’s should take place.  As far as outcome we can make a case for both.  We’ve been favoring the week of March 7th or the 22nd to the 29th as the most likely points for a potential low and bounce in gold. So far the 7th has yielded a low from which a bounce has taken place.  We should know next week whether the 7th was it or whether we’re going lower to the 22nd – 29th.    Watch 1578-1585 on the downside and 1593-1598 on the upside.   It’s possible we’ll stay in that range. Whichever way it breaks from that range has a good chance of setting the pace as to 1560 or 1610.

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GOLD CURRENT TRADE
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Our Position 
Bought 1Apr Gold on 13/03/2013

Entry: 1587.50

Stop Loss: 1575.50

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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