Gold moved strongly higher this morning and, after a brief pause at the 50% retracement level, jumped higher at the COMEX open, hitting a high of 1458 before falling back to currently trade around 1454.
Although many analysts and commentators are rejoicing at gold's comeback, we are less impressed - the bounce has been relatively weak and shallow and now seems to be forming a "bearish rising wedge", suggesting further declines are imminent. Only a strong move above 1475 will make us think otherwise.
As the price has moved back to the top of the recent uptrend channel, we have opened a short position at 1452 as we are expecting the decline to resume from this area. There is still too much confidence and optimism in the gold market to say a bottom is in at 1322 - too many people are assuming the price will bounce right back to 1525 and beyond, with the bull market continuing on its merry way.
We don't see it like that - the recent decline has inflicted massive technical damage on the gold chart and the recovery since the lows does not inspire confidence that it was a quick sell off to take out the stops before the next rally leg begins. We will not consider this scenario to be the favoured outcome until we reclaim 1525 - until then we assume that the market is now in bearish mode and will trade accordingly, though as we mentioned above, a strong move past 1475 will suggest the bullish scenario has some merit.
Oil is holding yesterday's gains, silver is very strong today, as are copper and the other industrial metals. Equities continue to exhibit strength, whilst the dollar is holding around 83, poised to move higher for an attempt at 84.
All in all a "risk on" day, with gold acting more like a commodity than a currency, as had been the trend recently.
Although many analysts and commentators are rejoicing at gold's comeback, we are less impressed - the bounce has been relatively weak and shallow and now seems to be forming a "bearish rising wedge", suggesting further declines are imminent. Only a strong move above 1475 will make us think otherwise.
As the price has moved back to the top of the recent uptrend channel, we have opened a short position at 1452 as we are expecting the decline to resume from this area. There is still too much confidence and optimism in the gold market to say a bottom is in at 1322 - too many people are assuming the price will bounce right back to 1525 and beyond, with the bull market continuing on its merry way.
We don't see it like that - the recent decline has inflicted massive technical damage on the gold chart and the recovery since the lows does not inspire confidence that it was a quick sell off to take out the stops before the next rally leg begins. We will not consider this scenario to be the favoured outcome until we reclaim 1525 - until then we assume that the market is now in bearish mode and will trade accordingly, though as we mentioned above, a strong move past 1475 will suggest the bullish scenario has some merit.
Oil is holding yesterday's gains, silver is very strong today, as are copper and the other industrial metals. Equities continue to exhibit strength, whilst the dollar is holding around 83, poised to move higher for an attempt at 84.
All in all a "risk on" day, with gold acting more like a commodity than a currency, as had been the trend recently.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
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
