Gold Trend 8/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=Neutral –need a close below 1403 to return to downtrend.
Short Term=Neutral/bullish– resistance 1487-1494-- -- weekly support 1439-1449 and monthly at 1415-1425---close below 1439 and bearish. Close above 1489 and full bullish.

Support and Resistance
(NOTE JUNE GOLD NUMBERS)
Initial Resistance 1458-1468 and 2nd tier 1477-1487
Initial Support 1438-1443 and 2nd tier 1423-1433

Gold Hourly Chart

Gold broke under the weekly and monthly pivot at 1465 on Tuesday and never recovered as prices moved all the way down to 1440 before staging a rebound back to the 1450 area. We broke under the wedge but price has moved back inside of it. Whether it was a fake out and a test of last week’s low is uncertain as we move to mid week Wednesday where gold makes a lot of its highs and lows. The low side is certainly favored for this Wednesday and until gold closes back above 1465 the bears have the slight advantage. 

In the last two weeks gold has recovered all sell off attempts and has marched right back to resistance at 1477. But it has been trying to get above 1477-1487 for two weeks now without success. Perhaps it’s because we’re in the window for a pullback low that gold is going thru its cyclical motion (and that’s what we’re hoping for). Resistance is the dotted red line forming a wedge in that resistance zone and support is last week’s low at 1439.30 and today’s low at 1440.40. If we break below by more than two dollars on Wednesday we’ll favor a move to that lower dotted red channel line near 1430. There’s also a horizontal FIB line at 1420. Thus 1420-1432 define the next monthly support and if we take out the lows of today, is where this week’s low will most likely take place.

In summary, we got a pull out of the wedge area and tested weekly support. Prince needs to desperately get back inside the wedge and then we need to vault above 1487 in order for the next short term move up to begin.

As long as were below that wedge and the green 200 hour moving average the bears have the advantage. As you can see price is right at the 200 hour green line average now. We need to get back above that 1465 weekly/monthly pivot as soon as possible. As long as we are below it the potential for gold to go down to the 1320-1332 area is in play. The one thing we think is important is that gold has always recovered pretty fast back to 1475 so let’s keep that factor in mind also as that has been a characteristic recently of gold.

What Next?

We've had a good rally in gold up until now. The negatives are silver and the HUI are lagging pretty bad. It is rare that gold can do it on its own and practically unheard of. The fact that the HUI is only 13 points from its low is most troublesome. It has been our warning beacon all through the downtrend since February and it’s really not acting well yet. You saw the price pattern on the chart and how it has been repeating. Its right at that point now and it needs to turn up. It’s as simple as that. These stocks are already trading at valuations that haven’t been witnessed since before the turn of the century.

With mid week Wednesday here, and with gold below 1465, the bears have a slight advantage on the Wednesday trade. If we break below 1437 then the 1425-1432 area is the next support we’re looking for to test. The short term trend is still up but not by much.

Bottom Line

Most important is the resistance that we reached at 1477-1487 is where price traded in the last 15 minutes of Globex before the horrific drop on crash Monday.  That resistance point has been tested for almost two weeks and we have not exceeded it. Until we do, the short term trend could turn down from here.  We need to get back above 1465 and then exceed that 1487 peak.  We're right at the tip point here that is going to define the next two weeks.  With silver and HUI lagging and a cycle that shows both rotations are possible we can't take for granted that we're going to move higher just yet.  Lets remain cautious for the moment and see if we can hold that 1440 low.  The May low is still 120 dollars above the April low. If physical inventory is really tight then fine that plays.  if its not then 140 dollars above the April low is not a a safe number to assume will hold without further testing below.

 

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