In very quiet trading yesterday, gold oscillated around unchanged, making a high of 1585 and a low of 1569 that successfully retested the newly forming uptrend channel.
Gold is trading at around 1580 this morning on decent demand out of Asia, as market participants see value at these price levels and gain confidence that the recent decline has halted.
Oil has bounced off the 61.8% retracement of its recent rally and is trading slightly higher this morning and the dollar has dropped a little, both of these factors are helping to lift the gold price in the early trading session.
Gold continues to build a base above 1550 in anticipation of a new rally leg that should take the price to a new cycle high by July 2013. Whether this cycle high corresponds with an all time high as the previous one did remains to be seen, though we expect the price to be many hundreds of dollars higher by this target date.
Gold is trading at around 1580 this morning on decent demand out of Asia, as market participants see value at these price levels and gain confidence that the recent decline has halted.
Oil has bounced off the 61.8% retracement of its recent rally and is trading slightly higher this morning and the dollar has dropped a little, both of these factors are helping to lift the gold price in the early trading session.
Gold continues to build a base above 1550 in anticipation of a new rally leg that should take the price to a new cycle high by July 2013. Whether this cycle high corresponds with an all time high as the previous one did remains to be seen, though we expect the price to be many hundreds of dollars higher by this target date.
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 1584-1594-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 and we added a temporary gold line at the parallel level of the purple lines. As it turned out it provided support on Monday right to the tee. The gold market is mixed and being pulled both ways as a complete reversal where the managed money is the short holders and the bullion banks were able to cover a lot of their shorts. Now it comes down to whether the bullion banks go for the KILL in gold by loading up on shorts and allowing the funds to prosper with a downdraft or do they now begin to buy and force the funds to short cover? Either scenario allows for a big move in gold. If the bullion banks are indeed covering due to knowledge of a big price move up coming then it could be explosive as the funds will have to cover. But if the control boyz ever had a chance to deliver a blow to break 1520 this seems to be their time as the seasonal downtrend is in its final month before the North American Spring rally comes due.
The support on Tuesday is the 1568-1572 area at the gold channel line. The red channel lines at the bottom of the chart is where the lows where hit at 1555. That trend channel has now moved down to the 1525-1545 area. There is a Fibonacci support point (not shown) at 1542. Thus 1542-1558 is the only other support potential before the lower red channel lines. Key resistance is the weekly pivot point at 1580-1584 and the green 200 hour moving average at 1586-1587 and the purple channel line in the 1594-1597 zone. Last week’s high range was 1602-1604. THUS any move above that gold channel line at around 1605 would favor the upside to the 1630-1640 area. Keeping in mind the COT position, whatever direction is taken could provide a fast and furious move in either direction. In summary, if the gold channel line lets go and we break 1664-1668 we’ll favor the downside and if we break above the green 200 hour average and the purple channel line we’ll favor higher. Right now it seems the RANGE is that channel that is flanked with a lower gold line and the higher purple line. We favor price in that zone for Tuesday. With the March 5th cycle here something is bound to give in the next 48 hours. A plunge that reverses up will favor higher to next week, so watch for that fake out. Getting above that purple channel line and by more than a few dollars favors another test of 1602-1608.
What next?
Gold once again tested below 1570 and moving just a hair under the Friday low by less than one dollar. This March 5th date could be an important point not just for gold but perhaps for stocks also. So far stocks have defied gravity and the trend is very overextended but still up as MONEY is pouring in from Europe and at the moment from commodities. Tuesday has the potential to be an interesting day. In gold, the trend still remains down and price has not yet been able to establish anything substantial to the upside. What is most interesting is that GOLD has DETACHED from the stock market moving in an opposite direction for the longest time since July 2011 when gold went from 1555 (where it is now) TO 1920 in a short amount of time.
The word we heard again on TUESDAY morning when London opened is that central bankers will continue to provide liquidity to the markets.
Tuesday should be interesting to say the least. Watch the channel on the hourly chart. And the US stock market as it most likely makes an all time high in the Dow Jones.
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GOLD CURRENT TRADE
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GOLD CURRENT TRADE
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Our Position
Bought 1Apr Gold on 28/02/2013
Bought 1Apr Gold on 28/02/2013
Entry: 1577
Stop Loss: 1552
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.
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
