Gold Trend March 04,2013

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 1627 for neutral.
Short Term=Bearish --- Need a close above 1604 for outright neutral and 1620 for bullish
Support and Resistance
(APRILGOLD – SUBTRACT ONE DOLLAR FOR APRIL GOLD)
Initial Resistance 1585-1595-and 2nd tier 1601-1606
Initial Support 1564-1573 and 2nd tier 1555-1559

Gold Hourly Chart

Price broke the channel support lines on Friday and dropped to 1564 where we had no line support. I’ve added a temporary gold line at the parallel level of the purple lines.  We’ll use that as support on Monday.  The support on Monday is the 1555-1560 area at the red channel lines at the bottom of the chart. That price zone is important to the coming trend this week.  Additional support is the 1530-1542 area.  Resistance is the 1584-1594 area and 1602-1608.  The green 200 hour moving average at 1587 is also an area to watch.  There’s another wedge that might be forming at the upper gold downtrend line and the lower gold dotted uptrend line.  There’s a potential price will remain in that area on Monday.  There’s a minor cycle on the 5th of the month (plus or minus 24 hours). If we make a low near 1555-1560 or 1535-1542 in the next 48 hours we’ll be watching closely for a low and bounce higher into March 11th.  In sum the trend is still down and its best remain cautious.  If the short term cycles kick in we should have a bounce this week.

 What next???

Friday was another down day in the metals and stocks hit new lows. They continue to lead the metals dangerously lower in much the manner we saw in 2008. If that is the case then the stock market could join the downside.  Interestingly the metals have been detached from stocks and the last time that happened for such a period was in July 2011 when gold had a huge rally.

So if the stock market corrects (which we’ve been favoring to go lower into Easter starting from last week) then it will be important to watch the metals.  If they join the stock market down then things can get worse on the downside. If stocks sell off and gold rallies then we may have a bottom with a good bounce into the 11th of March. If not, then gold could fall hard with the market.  If stocks do fall the 1470-1480 area will be key for the S&P.

For now the trend remains down in gold. There’s a minor cycle on the 5th of the month (plus or minus 1 day) that could provide a low and then a rally to next week.  It has a good chance of developing. Let’s see what Monday brings.

BOTTOM LINE

The US dollar put in a good performance in February and now the stock market is beginning to weaken and join gold.  A higher dollar is money flow out of Europe and UK as their economy is once again on the border of recession. The US is right behind with the retail sector dropping like a rock.  Add Japan buying the US dollar to weaken its currency and it is causing the US dollar to rally.  The trends are still down in metal and its best to stay defensive until price at least stabilizes.

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GOLD CURRENT TRADE
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Our Position 
Bought 1Apr Gold on 28/02/2013

Entry: 1577

Stop Loss: 1552

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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