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6 hours ago
Gold Testing Support, Eyes on Upside Breakout
By: Bruce Powers | May 14, 2024
• Gold's position above 20-Day MA is critical, with a potential breakout above 2,364 indicating further strength towards the trend high of 2,378.
Gold has traded above the 20-Day MA for the past few days and again successfully tested the line as support today. This puts it in a critical short-term position. A drop below yesterday’s low of 2,332 is a break below daily support and the 20-Day MA, which is at 2,333 today.
Alternatively, a decisive advance above today’s high of 2,359, at the time of this writing, is a sign of strength, as it would signal an inside day breakout. However, a rise above Monday’s high of 2,364 is a more significant signal and has a better chance of seeing gold continue to strengthen from there. But the trend high of 2,378 needs to be exceeded to the upside before a trend continuation signal is generated.
Two Lines Mark Support
In addition to trend support represented by the 20-Day line, the uptrend line touching the lows of the most recent price action should also be given some attention. Notice that the 20-Day line and nearby uptrend line will converge within a day or two.
It could be hinting at further consolidation for a few more days. This week is an inside week so far. It is possible the week ends with the price of gold staying within the trading range of last week. If so, a sharper and sustained advance to challenge the 2,378 high and possibly exceed it, may have to wait until next week.
Drop Below 2,324 Eyes Deeper Pullback
On the downside, a bear flag may be in the process of forming with the internal uptrend line as a proxy for the lower boundary of the flag. It is not clearly formed yet but deserves to be watched to see if it progresses and becomes more clearly defined.
A drop below the trend line could see gold drop to test the 50-Day MA at 2,274. That price level is very close to the most recent swing low of 2,277. Given gold’s strong rally from the mid-February swing low, a test of support around the 50-Day line would not change the overall bullish outlook for gold. In fact, it would better prepare the market for a continuation into new record highs.
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3 days ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 11, 2024
• Following futures positions of non-commercials are as of May 7, 2024.
Gold: Currently net long 199.6k, down 4.6k.
Last Friday, gold bugs showed up at $2,285 – well before testing horizontal support at $2,240s. They built on that this week, as the metal rallied 2.9 percent to $2,375/ounce. This comes after two weeks of decline.
On April 12th, gold printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. Friday’s intraday high of $2,385, in fact, kissed a falling trendline from that high. This resistance likely gives way in the sessions ahead.
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3 days ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 11, 2024
NY Gold Futures closed today at 23750 and is trading up about 14% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. At the moment, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains in a bullish position at this time with the underlying support beginning at 23479.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have been generally trading up for the past week from the low of the week of April 29th, which has been a move of 4.380%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 4 weeks ago. Still, this market is within our trading envelope which spans between 20767 and 23969. Immediately, this decline from the last high established the week of April 8th has been important Before, this recent rally exceeded the previous high of 20832 made back during the week of January 29th. Nonetheless, that high was actually lower than the previous high made the week of December 25th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23402. Additional support is to be found at 22491. Looking at this from a wider perspective, this market has been trading up for the past 12 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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4 days ago
Gold Price Breakout Above Key Levels Signals Strength
By: Bruce Powers | May 10, 2024
• After triggering a bullish weekly reversal, gold's advance signals strength, with potential for further upside towards recent highs.
Gold triggered a bullish weekly reversal on Friday as it advanced above last week’s high of 2,347. The high of the day was 2,378 before it pulled back intraday. Gold is on track to end the week above last week’s high and above the most recent swing high at 2,352, further confirming strength. Yesterday, gold gave an initial sign of strength with a daily close above the 20-Day MA.
Today’s advance completed a 61.8% Fibonacci retracement of the recent decline around 2,373. Also, notice that today’s rally got above a top channel trendline and is set to close above it. That line represented resistance recently during the pullback.
Bullish Reversal on Weekly Chart
This could be the beginning of a bullish reversal that tests recent highs and potentially begins an advance to new record highs. The recent retracement stalled at a low of 2,277, which is near the 50% retracement of an internal upswing. However, when measuring a larger portion of the uptrend that starts from the February swing low, support came in above the 38.2% Fibonacci retracement.
A retracement to the 38.2% price level would also be relatively minor and reflect underlying strength. However, buyers were more aggressive and turned the price of gold back up at a higher price area. And momentum has been strong the past two days as the ascent began.
Price Levels to Watch on the Way Up
Price levels to watch on the way up include the three-week high of 2,389 and the 78.6% Fibonacci retracement at 2,398. There is then an interim swing high at 2,418 and the trend high at 2,431. An initial breakout above the top trend channel line triggered on April 8. But it failed to continue and led to the recent retracement. It is interesting to note that the market recognized that pivot as the two channel lines crossed at that point (circled).
Subsequently, the top lines acted as support for the next nine days as gold attempted to go higher. Watch for similar or more bullish price action once gold gets above both lines. It is now above one line. But that line is more significant as it measures the larger rising parallel trend channel.
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4 days ago
Gold Continues to Find Buyers Along The Way
By: Christopher Lewis | May 10, 2024
• The gold markets continue to see a lot of buying at this point, as the week has been very strong for the yellow metal.
Gold Markets Weekly Technical Analysis
The gold markets have had a very strong week, and it looks like we continue to consolidate more than anything else. The market continues to use the $2,300 level as an area that offers massive support. And this is an area that I think a lot of people will be paying attention to. So, if we do get a pullback from here, I think buyers will jump in and try to take advantage of it. The market also will be paying close attention to the area just above the $2,400 level.
And if we can break above there, then it’s likely that the market will go looking to the $2,500 level. The $2,500 level will of course be a major round figure that a lot of people are going to be paying attention to as the market had shot straight up in the air and then has spent a couple of days to jump around. And therefore, I think you’ve got a situation where we may have a little bit of noise come into the picture, but given enough time, I do think that given the momentum that we had seen before that we will break out.
There are plenty of geopolitical concerns out there that will continue to drive gold higher. And then of course, everybody’s printing and they’re about to start cutting rates, which is the same thing. So, this really could send gold spiking higher over the longer term. Because of this, I believe that the markets will have to see a certain amount of a pullback to finally break higher, but it eventually will give enough time.
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5 days ago
Gold Price Forecast: What’s Next for the Precious Metal?
By: Bruce Powers | May 9, 2024
• A breakout above key resistance levels, including 2,347 and this week's high, could signal a sustained advance for gold, following its multi-year basing pattern breakout in March.
Gold showed strength today, rising to test resistance around the 20-Day MA with the day’s high of 2,342, at the time of this writing. That is an eight-day high for which it traded within a relatively tight range. Today’s high generates a new high for the consolidation range. Although it is a sign of short-term strength, it doesn’t change the near-term outlook. A daily close above the 20-Day MA at 2,335 would begin to do that. Also, after today’s session, a daily close above today’s high would also be a sign of strength that may lead to increased demand.
Testing Resistance
So, what happens next will be of interest. If gold moves above today’s high (also 20-Day MA), then higher prices may follow. But if today’s resistance holds and is followed by a pullback, a continuation of the retracement remains in play. Last week’s high of 2,347 is also an important near-term price level as a rally above it will trigger a bullish reversal in the weekly time frame. Currently, gold is set to complete this week as an inside week.
Therefore, starting next week a breakout above this week’s high would provide a bullish signal, keeping in mind that such a move would also exceed resistance around the 20-Day line. Buyers have regained control of silver following today’s rally above its 20-Day MA. This might be a warning that gold could be about to do the same. Price action will provide a guide.
Watching for Signs of Strength
Potential lower targets have been discussed in recent articles, so today let’s consider the upside potential. A decisive breakout above last week’s high of 2,347 will provide a bullish signal that could lead to higher prices, or above this week’s high once the week completes. Additional strength will be indicated on a rally above the most recent swing high on the daily chart at 2,352 (C). Once there is a daily close above the slightly higher level, the chance for a sustained advance improves.
Minor Retracement Shows Underlying Strength
When considering the larger picture. Gold broke out of a multi-year basing pattern in March and kept going until reaching the current record high of 2,431. If last week’s low of 2,277 is the completion of a retracement, it would reflect strong underlying demand for gold as buyers stepped up before a 38.2% Fibonacci retracement completed.
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6 days ago
Gold Bearish Bias Persists as Consolidation Persists
By: Bruce Powers | May 8, 2024
• Gold's price movements suggest a bearish bias, with key support levels and potential targets indicating a possible continuation of the current downtrend.
Gold continues to go nowhere as it further trades within a seven day price range on Wednesday. The stage is set for a continuation lower. A bearish bias remains given the breakdown from a bear flag last week. Gold also continued to fall away from the 20-Day MA, which was tested as resistance all this week. April 23 was the first decline below the 20-Day line since the rally began on February 29 with a breakout from a symmetrical triangle bottom pattern.
50-Day Moving Average is Key Lower Target
A key lower potential support level is around the 50-Day MA, currently at 2,251. It is close to converging with a Fibonacci confluence zone from 2,261 to 2,255. Together, they create a price range from 2,261 to 2,255. This will be a decision zone where there may be signs of support followed by a bullish reversal. However, there are lower price targets in the case that gold continues to retrace the previous advance.
Lower Targets if 50-Day Line Fails to Hold
The initial target from the bear flag pattern is at 2,238, while a falling ABCD pattern targets 2,212. That lower price level is given added significance by the 50% retracement at 2,208. It is important to be aware that the low support level from April was at 2,228. This means that if gold falls below 2,228 on the way to the lower price zone, it will have triggered a bearish move on the monthly chart. That would be a sign of weakness that could make it more difficult for the uptrend to recover without further consolidation or retracement.
Recognition of Rising Trend Channels
How down might gold go? There are two rising trend channels on the chart of gold. A larger one and smaller one. Gold remains within the boundaries of the smaller channel, that is within the larger channel. Last month there was a false breakout of both trend channels, leading to the current retracement. Typically, once a side of the channel has been tested as resistance in this case, the potential for gold to fall to test the lower channel line becomes possible. Of course, that would occur first on the smaller channel. But the price represented by the line will depend on when it is approached given its downward slope.
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7 days ago
Gold Continues to Build a Base Above $2300
By: Christopher Lewis | May 8, 2024
• The gold markets continue to see a lot of support just below, as the market will continue to try to build a bit of a base in this general area, just above the $2300 level.
Gold Markets Technical Analysis
The gold market fell initially during the trading session on Wednesday as the $2,300 level continues to cause quite a bit of support. All things being equal and all things being the same, I think that this is a market that sooner or later will continue to go higher, but we may be taking a little bit of a breather at this point.
Ultimately, this is a market that, given enough time, should see buyers coming in to try to take out the recent highs at the $2,400 level over the last week or so and then go looking to the $2,500 level. Underneath, I see a lot of support that extends down to the $2,250 level, which is also backed up by the 50 day EMA. With that being said, it does look a little bit like a bullish flag. And I think that bullish flag is something that you need to pay attention to, albeit a messy one.
It does suggest that gold markets do have another leg higher in them. It makes a lot of sense if you think about it, due to the fact that there have been major geopolitical concerns, and with that, gold will flourish anyway. Furthermore, we also have a situation where the governments around the world are borrowing massive amounts of money, including the United States. So therefore, that also tends to make gold a bit more attractive. I think at this point, you are just simply seeing consolidation before the continuation.
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1 week ago
Gold Sideways Trend Continues, Bear Flag Pattern Signals Potential Decline
By: Bruce Powers | May 7, 2024
• Gold remains in consolidation below key resistance levels, with a bearish flag pattern indicating potential for lower prices unless it rallies above recent highs.
Gold remains stuck in consolidation and has been trending sideways for the five days. Consolidation is occurring just below resistance represented by the purple 20-Day MA, currently at 2,330, and the 38.2% Fibonacci retracement at 2,322. The 38.2% price zone previously represented support and now resistance. Further, gold remains under a bear flag that triggered a sharp decline starting with a break below 2,320 last Tuesday. Since then, recent price action has done nothing to negate the potential for a deeper pullback and lower prices indicated by the breakdown of the flag.
Bear Flag on Deck
The bear flag shows a small rising parallel trend channel. Each boundary line has three touches from price. There is symmetry represented in the pattern as the channel can be divided in half. In other words, it is a clear and solid pattern that has been broken. It shows a pause in the degree of selling that occurred prior to the flag’s formation. Therefore, a continuation lower is the most likely resolution and that has been indicated by the breakdown last week.
Nevertheless, a five-day pause below the breakdown level does not show selling pressure increasing. It leaves open the possibility of a failure of the bearish pattern. A failure would occur during an advance prior to new retracement lows. However, a rally above last week’s high of 2,347 would need to occur for signs of a failed bearish pennant.
Key Near-Term Support at 2,227
Support from the recent consolidation is at last week’s low of 2,227. The next bearish signal will be indicated on a drop below that price level. Calculating the measuring objective for the bear flag provides a minimum target of 2,238. However, the orange 50-Day MA has been rising as the price of gold consolidates. If it continues to consolidate for a while longer, the 50-Day line may join a slightly higher target zone from 2,261 to 2,255. If it does, the chance of hitting that price zone will increase. The 50-Day line is currently at 2,246.
There is also a lower potential target zone from around 2,212 to 2,208. However, last month’s low support was at 2,228. If this lower price zone is reached, then the monthly low would have been broken. A drop below a monthly low would diminish the current underlying bullishness that remains in the market.
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1 week ago
Gold Continues to See Strength
By: Christopher Lewis | May 6, 2024
• The gold market continues to see a lot of pressure to the upside, as the gold markets are being used to protect wealth against devaluation, and of course geopolitical issues around the world.
Gold Markets Technical Analysis
The gold market initially pulled back just a bit during the trading session on Monday, dipping below the 2,300 level, only to turn around and show signs of life. The market right now is looking at $2,320 as a little bit of a barrier, but I think given enough time, we probably go higher.
You will of course have to pay close attention to interest rates in the United States due to the fact that the Federal Reserve is still very much in the picture. And of course, people are worried about inflation, but at the same time that can actually help gold. You also have to keep in mind the geopolitical issues around the world, which can help gold. And quite frankly, just looking at the momentum on the chart helps gold.
So all things being equal, I think we are still very much in an uptrend when it comes to the gold market and therefore it’s a one-way trade you don’t want to be short of the gold market. Above we have the $2360 level and it’s a short-term barrier, but if we can break that, then I think we go looking to the $2400 level rather quickly, while underneath we have the 2280 dollars level offering significant support.
The 50-day EMA sits just below there as well and that of course comes into the picture for support and therefore I think it remains buy on the dip from a technical analysis standpoint as well. Quite frankly, fiat currencies around the world are being eviscerated as we just spend, spend, spend and that includes the US dollar. Yes, the US dollar is stronger than other currencies but that’s just in relation to other currencies. So, with that being said, the market looks like one you are still looking to buy.
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1 week ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 4, 2024
• Following futures positions of non-commercials are as of April 30, 2024.
Gold: Currently net long 204.2k, up 1.3k.
Bids showed up this week well before testing horizontal support at $2,240s, which is where the 50-day now lies. Gold dropped 1.6 percent this week to $2,309/ounce, with Friday’s low tagging $2,285. This was the second weekly decline in a row.
The metal has been unwinding the overbought condition it is in since bottoming at $1,824 last October and at $1,996 as recently as February 14th. On April 12th, the metal printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361.
The weekly remains overbought. At some point, gold bugs will be forced to defend breakout retest at $2,080s, which the yellow metal broke out of in early March. Right here and now, they have an opportunity to put their foot down. Nearest resistance lies at $2,350s.
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1 week ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 4, 2024
NY Gold Futures closed today at 23086 and is trading up about 11% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Immediately, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23380 and support forming below at 22962. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 3 weeks ago. Still, this market is within our trading envelope which spans between 17100 and 27120. Immediately, this decline from the last high established the week of April 8th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 20832 made back during the week of January 29th. Nonetheless, that high was actually lower than the previous high made the week of December 25th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 11 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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2 weeks ago
Gold Technical Signals Point to Potential Downside
By: Bruce Powers | May 3, 2024
• Despite holding support around the 50% retracement level, gold faces more technical bearish signs, with a bear flag pattern indicating potential for lower levels ahead.
Although gold reached a new retracement low of 2,277, it continues to find support around the 50% retracement level. It is set to end Friday above the 50% retracement for the third day in a row, which is at 2,289. However, there remains more technical bearish signs than bullish indications currently, as it is in the process of retracing prior gains.
Bear Flag Continuation Potential Remains
A bear flag trend continuation pattern triggered on Tuesday and gold closed weak, near the low of the day and below the prior April 23 (B) swing low. That is a bearish sign indicating that it wants to go lower. However, rather than continue lower following the bearish signal, for the past three days gold has been consolidating around Tuesday’s price range instead. Nonetheless, price patterns are indicating lower support levels will likely be tested before the larger bull trend is ready to resume. An advance above last week’s high of 2,352 (C) would be needed to change that outlook.
Several Lower Targets
The next potential support area below this week’s low is a range of Fibonacci levels from 2,261 to 2,255. But that may be an interim level as the 50-Day MA has not been tested as support since the February 29 symmetrical triangle breakout. Since the 20-Day MA has failed to hold as support, the 50-Day line becomes a target. It is currently at 2,234, and very close to an initial target derived from the bear flag measurements. That pattern indicates a potential target of 2,238. Be aware that April saw support at a low of 2,228.
Support From April at 2,228
If the next lower price zone is to be reached this month, a bearish month signal will have triggered. If that happens, sellers could get more aggressive and drive prices lower. Below the 50-Day line there is the completion of a falling ABCD pattern at 2,212 and a 50% retracement level at 2,208. That would be the price area to watch for support if the 50-Day line is broken followed by April’s low.
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2 weeks ago
Gold Bearish Signals Point to Deeper Retracement
By: Bruce Powers | May 2, 2024
• Top trendline and 20-Day MA now act as resistance after previously behaving as support, indicating a bearish turn for gold..
Resistance was tested again today in gold for the second day in a row following the breakdown from a bear flag on Tuesday. Notice that resistance occurred around prior support represented by the 38.2% Fibonacci retracement level of 2,322. The 38.2% price zone was tested as support on the first pullback from the recent 2,431 record high on April 15. This is typical price behavior in a market that is turning bearish. Prior support levels become resistance. Although the bull trend remains well intact a deeper retracement is likely before it is ready to resume.
Signs of Weakening as Previous Support Becomes Resistance
Similar behavior was seen recently around the top trendline and 20-Day MA. Each previously represented a support zone. Following the sharp selloff on April 22 that dropped gold below the top trendline, it was tested as resistance. Once the 20-Day MA failed as support it was subsequently successfully tested as resistance. Combined with the breakdown of a bear flag on Tuesday, gold looks to be telegraphing a deeper retracement. And the bear wedge just triggered, so it remains in the early stage of another leg down. Nevertheless, a decisive advance above this week’s high of 2,347 would negate the bear flag.
Several Lower Targets
Following a drop below this week’s low of 2,282 gold will likely first be heading towards a small Fibonacci confluence zone from 2,260 to 2,255. If it keeps falling the minimum 2,238 target from the bear flag comes into view. Now that the 50-Day MA has risen a bit above the next lower target zone, it falls close to the flag target at 2,229. A little lower is a 2,212 to 2,208 price zone consisting of the initial target from the descending ABCD pattern and the 50% retracement of the swing started from the February low, respectively.
April Low at Risk
Of note is last month’s low of 2,228. It is significant since it was a monthly low. A drop below it is bearish by itself, but the implications would depend on what happens next. Does gold continue to fall to test lower price zones? If it does, the speed of recovery of the 2,228 will be telling.
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2 weeks ago
Gold Bear Flag Breakdown Points to Lower Prices
By: Bruce Powers | April 30, 2024
• Gold broke down from a bear flag pattern, signaling a potential further decline towards key support levels around 2,212 to 2,238, including the 50-Day MA.
Gold breaks down from a bear flag on Tuesday with a drop below Monday’s low of 2,320. The decline may see a repeat of the drop that followed the 2,431-record high. It was followed by a decline to a low of 2,291, essentially reaching the 50% retracement. A measured move of the second decline, from the top of the flag, matches the first decline (purple arrows) at 2,212.
This is the same as a falling ABCD where the pattern is identifying symmetry between swings. The 2,212-price level is within a price range from 2,218 (50-Day MA) to 2,208 (50% retracement). Since the 20-Day MA has been busted, the 50-Day line becomes an obvious eventual lower target.
Bear Flag Measuring Objective
Measuring the bear flag provides a slightly different target that is a little higher than the 50-Day line. If the flagpole is measured from the daily breakdown of the April 19 low of 2,373 to the recent retracement low of 2,291, a potential target of 2,238 is calculated. Given the clarity expressed by today’s selling (wide range red candle with trading continuing near the range lows) it seems that the chance of meeting the flag target becomes more likely. Selling doesn’t happen in one day and there is some similarity between today’s wide range day and the first on April 12, and the second on April 22.
Interim Target
Nevertheless, the next potential support zone is around 2,261 to 2,255, consisting of two Fibonacci levels. Also, an internal uptrend line is close to the price zone depending on when it is reached. It provides an added indication on the way down.
Regardless of the potential support levels on the way down, given the large rising parallel trend channel in gold, the lower internal uptrend line could also be reached. We will be watching for clues on the way down. As of now, the price zone around the 50-Day MA is the deepest anticipated retracement.
Weekly Bearish Signal
Last week’s low and the next support level, although minor, is 2,291. A drop below that level will trigger a bearish continuation on a weekly basis thereby further supporting the likelihood of lower prices. Gold had a strong run and long-term bullish breakout. It is coming off a 22.5% sharp rally in only 41 days. A deeper retracement is healthy for the market and will better establish support in preparation of the next rally.
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2 weeks ago
Gold Struggles Amid Technical Challenges
By: Bruce Powers | April 29, 2024
• Bearish flag forms, increasing retracement risk. Drop below 2,320 triggers breakdown.
Not much of a change for gold on Monday as it continues to attempt to advance from the 2,291-swing low hit last Tuesday. Although it is on track to close in the top quarter of the day’s range with a bullish hammer candlestick pattern it remains stuck around the 20-Day MA and a top rising trend channel line. Since the low last Tuesday, it has managed to complete a 38.2% Fibonacci retracement but not much higher. Together, these are some of the technical factors that continue to weigh on the price of gold.
Downward Pressure Remains
The longer gold attempts and fails to rally, the greater the chance for a retracement lower. There is now a clear bear flag that has formed on the daily chart for gold. Today’s low of 2,320 provides confirmation of the lower parallel line of the pattern. A decisive breakdown from today’s low triggers the bearish pattern. If it occurs the 2,291-swing low will be at risk of being broken as the next lower support zone is around 2,261 to 2,255, derived from two Fibonacci levels.
Further down is the target from the bear flag. It comes in around 2,238, which is below the 2,255-price zone but above the next lower price zone from 2,212 to 2,208. Notice that both an uptrend line and 50-Day MA are included in that lower price zone. The 50-Day line matches the top of the zone. If the 20-Day MA is broken to the downside the chance of reaching the 50-Day increases.
Downside Risk Remains if Higher Prices Stay Within Flag Boundary
Regardless of the potential for a deeper retracement, the possibility for an upside continuation remains. A decisive breakout above Friday’s high of 2,352 would be needed for bullish signs followed by a daily close above that price level. If this bullish scenario unfolds, keep in mind that higher prices that trade inside the rising parallel bull flag, remain within the flag.
The flag may expand yet remain bearish if trading continues inside the two rising parallel lines of the flag. A daily close above the top flag channel line would be needed for a clear bullish continuation signal.
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2 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 27, 2024
• Following futures positions of non-commercials are as of April 23, 2024.
Gold: Currently net long 202.9k, up 968.
Gold is either healthily digesting its massive gains since last October or is on the way to unwinding the overbought condition it is in.
On the 12th, the metal printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. This preceded a nearly parabolic move higher. Last October, gold bottomed at $1,824 and tagged $2,047 as recently as March 1st.
Since the peak two weeks ago, gold has acted tentative, with this week down 2.8 percent to $2,347/ounce. The weekly particularly is way overbought, and this raises the risk to a move lower toward near-term support at $2,240s. Worse, gold bugs will be forced to defend breakout retest at $2,080s, which the yellow metal broke out of in early March.
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DiscoverGold
3 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 27, 2024
This market made a new high today after the past 3 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 23644. Therefore, this market has rallied over the past 52 trading sessionsNonetheless, the market remains neutral on our system indicators.
This market has not closed above the previous cyclical high of 24488. Obviously, it is pushing against this resistance level.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Solely focusing on only the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23479 and support forming below at 23046. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 2 weeks ago. Still, this market is within our trading envelope which spans between 16947 and 26879.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
3 weeks ago
Gold Faces Resistance, Risk of Deeper Pullback Looms
By: Bruce Powers | April 26, 2024
• Gold faces resistance at the 8-Day MA, signaling potential for a deeper pullback and bearish behavior.
Although gold has been slowly moving higher the past few days it encountered resistance at the 8-Day MA today with a high of 23,352. The 8-Day line has recently turned down, adding to the risk of a deeper pullback. The 8-Day line was previously an area of support and now it is showing signs of resistance. This is classic bearish behavior as a possible further retracement may be developing. Moreover, notice the relationship with the top channel line. Ire previously represented support but has been successfully tested as resistance over four days.
Drop Below 2,326 is Short-term Bearish
A drop below today’s low of 2,326 would provide an initial bearish signal that could lead to a test of the recent swing low at 2,291 and possibly a decline lower. If the 2,291-support zone fails to stop a decline the next lower target zone is from around 2,261 to 2,255. Two Fibonacci levels point to that price zone. Lower still is the 50-Day MA at 2,206. Further
Upside Potential Remains
On the upside, a breakout above this week’s high of 2,389. Would be needed to provide confidence that a rally may be able to continue higher and challenge the most recent record high of 2,431. Upside targets in gold remain. The question is will it enter a deeper retracement prior to a new high? The first higher target is the completion of an extended retracement at 2,462. It is followed by a price zone from around 2,480 to 2,488. The two-week low of 2,324 can also be watched for either signs of support or a breakdown. Certainly, it will provide a clue.
Watch for Additional Tests of Resistance
There may still be further tests of resistance heading into next week but the chance for a deeper retracement grows. Let’s consider the two recent sharp down days that reflected some degree of panic selling. The first was on April 12 and the second on April 22. If Friday’s high ends up being a swing high the chance for a further decline increases as well as the 2,212 to 2,207 lower target zone.
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3 weeks ago
Gold Short-Term Bullish Momentum but Resistance Looms
By: Bruce Powers | April 25, 2024
• Gold's outside day signals short-term bullishness, but resistance at the 20-Day MA and range around recent swing highs could cap gains.
Gold traced out an outside day today as it continues to flirt with the 20-Day MA as resistance. Earlier in the session gold fell to a low of 2,305 where it encountered support the led to an upside breakout above Wednesday’s 2,337 high. Today’s high was 2,345, at the time of this writing. Gold closed just below the 20-Day line yesterday and it continues to trade around the 20-Day MA.
Short-Term Bullish
Nevertheless, today’s price action is short-term bullish and could lead to higher prices if today’s high of 2,345 is exceeded. If today’s bullish action continues gold would be heading up into a range of resistance around the recent swing high. The 8-Day MA is at 2,352 and this week’s high is at 2,389. This would seem to indicate a rally will likely encounter resistance before gold exceeds the recent record high of 2,431.
Resistance Around 20-Day MA Remains a Concern
Resistance was seen today, as well as the prior two days, around a top rising parallel channel line that previously was part of a support zone. In other words, the market is telling us prior support, represented by the line, may now be resistance. That is a small clue showing weakening in price.
Further, the 8-Day MA has turned down for the first time since mid-February, and it another sign that the short-term trend is weakening. It remains to be seen whether that weakening continues. A drop below today’s low would be the first sign of it. The recent swing low of 2,291 would then be at risk of being tested again as support, and it may fail leading to a deeper retracement.
April Closing to Provide Clues
Considering the monthly chart, gold is currently trading around the halfway point for the month’s trading range. If it closes the April at or below the 50% level, which is at 2,330 currently, it will end the month in a relatively weak position. March completed with a large green candle that closed near the highs.
It shows strong upward momentum that marks a breakout of a long-term base. Given the long-term breakout, it wouldn’t be surprising to see gold end the month in a strong position, above the 50% level. This may increase the chance for a continuation of the advance from this week’s low.
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3 weeks ago
Gold No Progress from Bullish Setup
By: Bruce Powers | April 24, 2024
• Gold's price movement shows uncertainty as it approaches key resistance levels. A breakout triggered by a bullish pattern lacks convincing strength, while a bearish indication looms if the 20-Day MA becomes resistance.
There was little upside follow through on Wednesday, following a brief breakout above Tuesday’s hammer candlestick pattern. The high for the day was 2,337 and yesterday’s high was 2,334. Gold ended above the 20-Day MA on Tuesday following an earlier decline below it.
However, it is not yet clear where today’s close will be. Trading is happening around the 20-Day line at the time of this writing. A daily close below the line would be slightly bearish as it would be the first time the gold has closed below the line since the second half of February.
Watching for Further Signs
A bullish pattern breakout signal needs to have additional confirmation of strength following the breakout. Gold is already indicating that the hammer breakout is suspect given the relationship to the 20-Day MA. Also, the rise above yesterday’s high was minor and not convincing. It doesn’t show a clear improvement in demand. Further, notice that today’s high of 2,312 found resistance at a top channel line that had been part of a support zone until Monday’s sharp decline.
Tuesday’s Strength Needs Upside Follow Through
Tuesday’s low of 2,291 completed a 50% retracement level of the internal trend. The subsequent bullish hammer candlestick and daily close above the 20-Day line indicated that the retracement in gold may have completed. However, an upside breakout and subsequent additional signs of strength were needed.
The breakout has been triggered but there are not yet additional signs of strength. A daily close today above the 20-Day would be one sign, but minor. Then, another breakout above yesterday’s high followed by a daily close above it will provide additional confirmation.
20-Day MA is Key
Also, on the bearish side, a daily close below the 20-Day is a bearish indication. Further, today’s low of 2,312 could trigger short-term weakening as gold again approaches yesterday’s low of 2,291. If that low is broken to the downside, then a deeper correction is likely. The next lower target would be around the 38.2% Fibonacci retracement of the full swing that began from the February swing low. That price level is at 2,261 and includes the 61.8% retracement of the internal upswing at 2,255.
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3 weeks ago
Gold Intraday Bullish Reversal Shows Strength
By: Bruce Powers | April 23, 2024
• Gold completes a 50% retracement, rebounds to 2,334, signaling potential upside breakout.
Gold completed a 50% retracement today with a low of 2,291 before buyers took control and ran the precious metal up to a high of 2,334, at the time of this writing. Earlier in Tuesday’s session the sellers were in control and dropped gold down to below its 20-Day MA to test support around the 50% retracement of the internal upswing. The 50% level is at 2,289. That is close enough given the subsequent bullish reaction following that low.
Quick Recovery of 20-Day Line is Bullish
Since around February 23 gold has been trading above the 20-Day line. Today was the first direct test of the line as support since then. Although it failed to maintain support, gold may close above the line with a bullish doji hammer candlestick pattern. Both a close above the 20-Day MA is bullish, and the fast recovery of the line is also bullish. It points to the possibility that a correction may be complete, or at least for now.
Upside Breakout Above Tuesday’s High
An upside breakout will be triggered on a rally above today’s high of 2,334, while a drop below today’s low of 2,291 signals a continuation of the correction. Also, gold could trade tomorrow inside day, which would provide a setup for Wednesday. A rally will be heading up into a potential resistance zone that arguably starts from around 2,354. Also, keep an eye on potential resistance around the 8-Day MA at 2,362 and this week’s high of 2,389.
Long-term Base Breakout in Play
Gold broke out of a multi-year basing pattern recently, which greatly improved its chances to continue to strengthen and trend higher following a correction. The degree and length of the current correction will tell us something about underlying demand. It should not be surprising if it stays strong given the significance of the long-term breakout. Upward momentum really kicked in upon the breakout of a symmetrical triangle on February 29. By March 5 a new record high in gold had been reached.
Drop Below 2,291 Starts a Deeper Retracement
There will likely be a retracement to test support around the orange 50-Day MA at some point during the advance. However, so far, it doesn’t look like it will happen in the current correction. Nonetheless, as noted above, a drop below today’s low of 2,291 could accelerate that scenario. But first there is potential support around the 2,261-price area, which the 38.2% Fibonacci retracement of the bull upswing, beginning from the February 14 swing low.
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DiscoverGold
3 weeks ago
Jack Chan: Gold Price Exclusive Update
By: Jack Chan | April 21, 2024
Our proprietary cycle indicator is UP.
To public readers of our updates, our cycle indicator is one of the most effective timing tool for traders and investors. It is not perfect, because periodically the market can be more volatile and can result in short term whipsaws. But overall, the cycle indicator provides us with a clear direction how we should be speculating.
Investors
Accumulate positions during an up cycle and hold for the long term.
Traders
Enter the market at cycle bottoms and exit at cycle tops for short term profits.
GLD is on short term buy signal.
GDX is on short term sell signal.
XGD.to is on short term buy signal.
GDXJ is on short term sell signal.
Analysis
Our ratio is on sell signal.
Trend is UP for USD.
Trend is UP for gold stocks.
Trend is UP for gold.
Gold has broken out firmly and has no overhead resistance.
A double bottom will be positive for gold stocks.
But first, we must overcome resistance to confirm that double bottom.
Summary
Gold sector cycle is up.
Trend is up for gold and gold stocks..
$$$ We were stopped out with a small profit this week.
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4 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 20, 2024
• Following futures positions of non-commercials are as of April 16, 2024.
Gold: Currently net long 201.9k, down 496.
Last Friday, gold printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. This behavior showed up after a vicious rally. Last October, the metal bottomed at $1,824 and tagged $2,047 as recently as March 1st. The Friday action could have set in motion a process of unwinding at least some of the overbought condition gold is in.
This week, gold did drop intraday Monday to $2,340 and that was it; the drop to the 10-day was bought, with the remaining four sessions just about trending higher all along the sharply-ascending average, ending the week up 2.2 percent to $2,414/ounce.
Non-commercials are in a wait-and-see mode, with net longs just north of 200,000 contracts in five of the last six weeks. They probably will start worrying if gold loses near-term support at $2,240s and most definitely if breakout retest at $2,080s fails. The yellow metal broke out of $2,080s early March.
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DiscoverGold
4 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 20, 2024
The NY Gold Futures has been in an uptrend for the past 2 days closing above the previous session's high. The broader rally has peaked with the last high established at 24488 back on 04/12 5 days ago. Up to now, we have not yet elected any Bearish Reversals from that high. Clearly, this high was formed after a rally of 42 days.
Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 2.35% from the previous session low. Our projected target for closing resistance for the next session stands at 24646, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Nevertheless, this session closed below our ideal projection for closing resistance warning that the market which stood at 24453 is forming a high. A break of this session's low of 23868 will warn that we have a potential temporary high in place.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23792 and overhead resistance forming above at 24148. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. Afterwards, the market bounced for 8 weeks reaching a high during the week of April 8th at 23217. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.434% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 19964 as it has fallen back reaching only 23402 which still remains 17.22% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 1 week ago. Still, this market is within our trading envelope which spans between 16752 and 26568. The broader perspective, this current rally into the week of April 8th has exceeded the previous high of 20832 made back during the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. From a pointed viewpoint, this market has been trading down for the past week.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
4 weeks ago
Gold Uptrend Faces Challenges
By: Bruce Powers | April 19, 2024
• Gold will complete the week with an inside weak, thereby setting price levels to signal either a move up or down next week.
Gold remains strong and in a clear uptrend, yet risks remain. It has been advancing in a rising consolidation pattern along support of the 8-Day MA since the pullback low on April 10. Bullish momentum has declined during this phase and gold has struggled to sustain a rally. It hit a five-day high of 2,418 today but is on track to close weak, in the lower half of the day’s range, at the time of this writing.
Fibonacci Confluence Zone Keeps Advance at Bay
Last week’s new record high of 2,431 found resistance at the top of an identified range of Fibonacci confluence, where targets of multiple measures line up. Given the subsequent bearish reaction on the same day it looks like the market recognized the resistance zone. The close was in the lower quarter of the day’s range following a new record high. That is not bullish behavior. Nevertheless, interest from buyers has remained strong as gold struggles this week to recapture that high. It has been unsuccessful so far.
Inside Week Sets the Stage
This week will end as an inside week, which is a form of consolidation on that time scale. Therefore, heading into next week a bullish signal would be indicated on a rise above this week’s high 2,418. If upward momentum is then sustained the record high will likely be challenged and possibly exceeded. The next upside target would be the 161.8% Fibonacci extension of the retracement of the large downswing starting from the August 2011 swing high at 2,457.
A 100% retracement completed at that high of 1,921 in July 2020. Further, a measured move completes at 2,480. Each measured move is marked with rising purple arrows on the chart. Since they cover a large time frame the 2,480 target has a good chance of eventually being reached and encountering resistance around that target.
Breakdown Leads to Pullback or Further Consolidation
On the downside, a bearish breakdown signals a drop below this week’s low of 2,324. The 8-Day line will be broken on a move below 2,368 and may provide a warning signal. Support may first be seen around the 20-Day MA, currently at 2,301, while the 50% retracement is nearby at 2,289. Rather than retracing it is also possible gold continues to consolidate near highs as it further prepares for a bullish continuation.
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4 weeks ago
Gold Holds Strong Above Support, Uptrend Intact
By: Bruce Powers | April 18, 2024
• Gold's near-term uptrend remains strong, holding above key support levels. A potential breakout above 2,393 could indicate further price rises.
Gold continues to hold above support around the 8-Day MA indicating that the near-term uptrend remains in place. That dynamic support trend indicator was only breached once in any meaningful way on Monday, but quickly rebounded. You can see how the 8-Day line was initially recognized by the market early in the current swing following the breakout from March 20. This also means that a decisive decline below the 8-Day MA may provide an early bearish signal for when a retracement may be starting. Of course, any signal should be further confirmed by additional confirmation signals.
Holding Above Support Zone
In addition to gold holding above the 8-Day line, it has also been successfully testing support around the two upper channel trend lines that previously identified resistance and now support. This is a sign of strength that shows continuing demand for gold. Today’s price action is on track to complete as an inside day. Therefore, a move above the high of 2,393 will provide the next sign of strength that could see prices rise further. Nonetheless, a breakout above this week’s high of 2,398 is needed for greater confidence that the price may continue to rise from there.
Trading Within Last Friday’s Price Range
Bullish momentum in gold has slowed since the new record high of 2,431 was hit last Friday. That high was followed by a bearish decline, which ended near the lows of the day. It has characteristics of a short-term blow off top. Nevertheless, there has not yet been bearish follow through, which is supportive of the bullish view. But this means that gold may rise above this week’s high yet remain within the wide range from Friday. Therefore, there will not be a clear bullish trend continuation signal given on the daily chart until the 2,431 level is triggered.
Weekly Setup Likely for Next Week
Since Wednesday’s trading is almost complete, it is likely that gold will finish the week with an inside week. If so, it will set up a potential inside week breakout to trigger a bullish continuation. That should provide a more reliable indication of strength than a daily breakout this week. It also means that it is not likely to move to new trend highs this week.
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4 weeks ago
Gold Support Levels Hold, Upside Potential Remains
By: Bruce Powers | April 17, 2024
• With consolidation above key support levels, gold's upside potential remains intact, despite recent caution signals.
Volatility in gold declines on Wednesday as pulls back to find support at 2,361. That is just above the 8-Day MA at 23.59. Another successful test of support at the 8-Day line keeps open the possibility of a continuation of the advance. The 8-Day line has done a good job of identifying support of the sharp rally. Therefore, a drop below the line is a sign of weakening that could lead to a deeper retracement.
Holding Above Support
Moreover, consolidation over the past eight days or so has occurred above support represented by the two top channel trendlines. Whereas previously the lines represented potential resistance. If gold can stay above key near-term support of both the 8-Day line and trendlines, it has a chance of continuing to advance before a deeper pullback than what’s been seen so far.
Demand Remains Strong
A 38.2% Fibonacci retracement was completed on Monday and buyers quickly stepped up to provide support. That day ended strong, in the upper quarter of the day’s price range and above the 8-Day MA. Earlier in the day natural gas had traded below the 8-Day line for a short time. In other words, the sellers had a chance to take it lower, but they could not. With the buyers remaining in chart, the potential for an upside continuation remains. Strength will next be indicated in a rally above Tuesday’s high of 2,398, with an earlier signal generated on a break above today’s high of 2,396.
Caution is Warranted Given Last Friday’s Bearish Signs
Last Friday’s sharp reversal off the new record high of 2,431 indicates caution is warranted for the long side. It has characteristics of a key reversal day that may yet see follow through to the downside. There is a possibility of hitting resistance prior to a new record high as trading is occurring within Friday’s range. Given the recent consolidation near the trend highs and difficulty in moving higher, there is always a risk of a sharp decline.
Of course, those looking to enter gold would likely prefer an entry following a pullback as it will set up a better risk/reward ratio. Nevertheless, a breakout to new trend highs will indicate that a pullback may not be coming before the bull trend continues. Those waiting on the sidelines will be forced to enter or continue to wait.
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4 weeks ago
Gold Buyers Remain in Control
By: Bruce Powers | April 16, 2024
• Gold's recent bounce off support and completion of a Fibonacci retracement indicate potential for higher prices, but a daily close above last week's high is needed for confirmation.
Following last week’s record high of 2,431 in gold, it has been testing support around the 8-Day MA, now at 2,354. Yesterday, it bounced off a low of 2,324 thereby successfully completing a 38.2% Fibonacci retracement. Also, support has been seen above the two top channel trendlines that cross around April 4 rather than trading below it.
Bounces off 38.2% Fibonacci Support
The subsequent intraday advance bodes well for higher prices. However, it remains to be seen whether that will happen before or after a deeper retracement. Generally, in Fibonacci ratio analysis, the 38.2% retracement is watched as a minimum pullback before the primary trend may exert itself. Since that has been accomplished, a bullish continuation is possible.
Risk of Deeper Pullback Remains
Nonetheless, a daily close above last week’s high is needed to confirm a bullish trend continuation. Until then, another pullback remains possible. A drop below Monday’s low will be a sign of weakness that could lead to a deeper pullback. If hit, gold would then also be clearly below the 20-Day line, a further sign of weakness.
If the 8-Day line is busted, then the 20-Day MA at 2,271 becomes a target. Further, the 50% retracement is slightly above there at 2,289. A little lower is the 61.8% Fibonacci retracement level at 2,255. Support could be seen near any of those price levels. The more significant potential support zone is down near the 50-Day MA at 2,153 and the prior record high of 2,135 from early-December.
Evidence to Suggest at Least a Temporary Top Was Reached
In addition to the Fibonacci confluence zone (more than two Fibonacci levels) seen near the current record high, there is also both time and price symmetry that points to a possible high. Once there is a match with the current advance relative to a prior swing, the chance for a reversal increases.
There have been two legs up off the swing low bottom in October of last year. The first leg up hit a top in 41 trading days. Last Friday’s high was 41 trading days from the start of the second leg up on February 14. Price symmetry is not as close of a match as the first leg up advanced by 17.9% and the second rallied by 22.5%.
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DiscoverGold
4 weeks ago
Gold Continues to See Uptrend
By: Christopher Lewis | April 15, 2024
• The gold market stabilized a bit during the session on Monday, as the weekend saw the Middle East situation has at least not gotten out of hand.
Gold Markets Technical Analysis
Gold markets have gone back and forth during the trading session on Monday, as it looks like we are still working with a fairly overstretched condition. We are above 70 on the RSI, and that suggests that perhaps we need to at least slow down if not pull back. And quite frankly, I think a pullback would be really healthy at this point.
The $2,200 level underneath could be support, and I’d love to see the market drop down to that area. Whether or not we get that move remains to be seen, but one thing is for sure, when we woke up on Monday, the situation in the United States, interest rate situation, of course, is still the same, but we got a little bit of a reprieve in the Middle East as the war did not expand the way it could have over the weekend, and therefore gold lost at least one of its short-term drivers. That doesn’t mean that we won’t go higher, it just means that we won’t get a panic shot higher, at least from that type of headline.
So, at this point, I’m looking for short-term pullbacks to buy into if I get that opportunity. The noise on Friday was kind of out of control, but this is still a market that I would not be selling. I think there’s just far too much in the way of upper momentum, and far too many things out there that could push gold much higher. With this being said the 50 day EMA is sitting just below the crucial $2,200 level, so that’s something to think about as well. And I will be very interested in buying a dip, especially if we lose something like a hundred dollars in this market.
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DiscoverGold
1 month ago
Gold Market Update - it's CORRECTION TIME...
By: Clive Maund | April 14, 2024
The turnaround in gold and the Precious Metals sector on Friday was really dramatic with gold dropping about $80 from its 11 am EDT peak and this brought out the old explanation about “the powers that be” cratering it by burying it with paper shorts. However, as we will see there may be a simpler explanation.
Gold had risen a lot by last Friday to become extremely overbought and it appears that a part of this rise was due to the fear factor relating to Iran attacking Israel and starting World War 3. This has set gold up for a “sell on the news event” where it drops when Iran actually does attack Israel, especially if, as seems to be the case at the time of writing, Iran simply lobs some fireworks at Israel so that “honor is satisfied” with most of these drones or missiles being shot down and those that arrive do little damage. While hostilities may continue at a low key level it appears that Iran is behaving with some restraint in order to avoid inciting intervention by the US which is Israel’s giant henchman.
To answer the question where gold and the PM sector generally is headed we are probably better using the language of the market itself and seeing what the charts have to say.
The prediction in the last Gold Market update posted on March 16th turned out to be correct as the following chart from that update shows, even if it took a little longer to get moving than expected…
So we will now look at gold’s latest 3-month chart to see what happened, and more importantly what it portends for the future. Before going any further it should be pointed out that because the last prediction was correct, it doesn’t mean that today’s will be.
As we can see, after the last update was posted gold did indeed break out upside from its bull Flag to enter a strong uptrend that took it up to approach $2450 early Friday at which point it had become extremely overbought – only once in the past 10 years has it gotten more overbought, and that was only by a small margin. It has been super-critically overbought on its RSI indicator pretty much all this month so far which itself is a warning, with a much more dire warning appearing on Friday with the dramatic high volume intraday reversal candle that can be described as a gravestone doji / spinning top, both of which are bearish in this position and indicate a reversal. This suggests that Smart Money had figured out that Iran’s attack on Israel would be a “nothingburger” so they took profits. Another reason for gold to consolidate or correct back here is the huge gap that that the price has opened up with the 200-day moving average which is a measure of how overbought it is. If gold does react back how much might it drop? – probably not much given the other much more serious bullish factors in play that aren’t going anywhere. It is thought unlikely that it will correct back further than about $2250 and it shouldn’t drop as far as the preceding Flag.
So what about PM stocks? They also put in bearish candles on Friday with the proxy ETF, GDX putting in a prominent “bearish engulfing pattern” on its chart on Friday as we can see on its 3-month chart below. This indicates a reversal, especially as it occurred on high volume – the biggest for 2 years.
Interestingly, copper also put in a bearish looking candle on quite high volume on Friday, a so-called “gravestone doji” which is where the open and close are close together near to the bottom of the day’s range…
The dollar, meanwhile, has done well on the fear trade, breaking strongly higher above resistance on Wednesday and following through with another big gain on Friday and while it is getting short-term overbought and so might consolidate or react back some, at this point it looks like it wants to go higher still. Some folks on Friday morning thought that we had entered a nirvana where the dollar and gold would rally strongly in tandem, but alas that proved to be false.
So this is thought to be a good time to scale back positions somewhat in the PM sector, with a view to buying back at better prices on a reaction or taking the opportunity to rebalance portfolios to include the strongest stocks in the sector. Where you have big gains in some stocks it might work out well to say take profits on half, then buy back after a reaction or consolidation or reposition into better stocks.
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DiscoverGold
1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 13, 2024
• Following futures positions of non-commercials are as of April 9, 2024.
Gold: Currently net long 202.4k, down 4.8k.
After just about going parabolic since early March when gold broke out of $2,080s, there were signs this week that the current rally has come too far, too fast. A breather is due and should be healthy. This week, the metal ticked $2,449 intraday Friday but only to end the session at $2,374/ounce, still up 1.2 percent for the week.
Gold bugs need to pay attention to this week’s candle with a very long upper shadow. This has appeared after a vicious rally. Last October, gold bottomed at $1,824.
At some point, breakout retest at $2,080s will occur. But before that happens, gold bugs will probably try to defend nearest support at $2,240s.
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