Gold Trend 17/May/2013

Long Term-Neutral – Need a monthly close above 1490-1526 in May to regain Bullish status.
Medium Term=Bearish Need a close above 1650-1675 to neutralize.
Intermediate Term=Bearish –need a close above 1465 to return neutral.
Short Term=bearish–  trading range broken to downside --it takes a close above 1425 to go neutral -- next support 1335-1355 and 1280-1310

Support and Resistance
(NOTE JUNE GOLD NUMBERS)
Initial Resistance 1401-1411 and 2nd tier 1419-1425
Initial Support 1363-1373 and 2nd tier 1335-1348

Gold Hourly Chart

The failure of 1420 has now opened up the potential for a move to the 1250-1320. Inside that range is the 38% total retrace of the bull market and is the most often retraced number in bull market corrections. gold had been so strong that it spent 2 years holding the 23% retrace area (1525) and while we don't use Fib targets as the most important factor in charts they do come in play a lot. the other number is 1310-1321 on a closing basis where the market would put in a double bottom.  There is one more number. The first push up from the April low went to 1360 and then pulled back to 1335 and from there prices rallied until it got to the highs on May 3rd at 1487. Before last Friday we had two lows at 1440, one on May 1st and one on May 7th.  It was on May 10th (the ideal day for next cycle to begin--may 10th - plus or minus 72 hours) that things changed. Out of nowhere we got a $50 dollar drop to 1420 (1418.60) but rallied back above 1440 to close the week. Since the week began, its been downhill ever since.

We've zoomed in on the hourly chart.The failure at the trading range and then 1420 has undercut the strongest support we had on the chart.  Now that 1420-1430 area is strong resistance.  For Friday we have resistance at 1394-1398 at the white channel line to the yellow mini moving average and then from 1408-1414 the down trending red line & up trending purple line.  Support is a 2 dollars below Thursday's low of 1368 and the 1372 mini red moving average.  Much stronger support is that red channel line from 1447-1453 and the lowest one at 1334-1337 which coincides with the first pullback that occurred after the 1321 low.  Friday's have not been pretty lately and with China closed on Friday and with FRIDAY having another LONG RANGE PRICE day potential, its hard not to favor the control boyz doing some work and shooting for the downside

What Next?

The trends in gold remain down and once again we're at important levels that are on the testing block. 

The exodus of the hot money in gold has left the control boyz with a lot more power and they once again flexed their muscles. 

Thursday was looking for consolidation but ended up being a down 6 dollar day.  FRIDAY is another potential LONG RANGE day and if it turned out to be a strong upside day, it would take a lot of bearishness away. 

If we get some downside into next week and silver makes a new low and gold doesn't it will favor a low point is being set up.  with that said, if massive physical sales can't stop the control boyz, then it will take empty vaults.  Somehow they keep coming up with some.  

China is closed on Friday and that means the control boyz usually have the advantage.

Until things change the downside remains in charge. We should be readying ourselves for a potential test of 1280-1335. 

Bottom Line

The pressure on gold remains in play and unabated and the staggering has the opposition going for the knockout punch.  So far the rally failed at 1487, the exact price area where gold closed on that last Friday before the Monday crash.  The strong sell off has erased a lot of the bullishness that physical was bringing to the market. Friday is another critical day and the pressure grows on many accounts.  Most interesting is we hear that the fundamentals haven't changed.  That means that the one thing we've been concerned about since February, a slowdown with deflationary potential to turn into a liquidity squeeze.  And that's the one thing we've always been concerned about as the only thing that can effect gold in a serious way.

 

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