Last week GOLD had a second positive week even though it had a mild pullback on Friday. The main driver for GOLD recently has been the realization that the Fed has a much more dovish tone on FOMC statement.That and the continuing wars in the Middle East and elsewhere shoud help hold the price up.
Here’s what Nat said last week:
… Gold could bounce up a little further. But there are lots of resistance lines ahead of the current price. It may be difficult for buyers to get the price through the major resistance line at 1225…
…The bounce could continue until the short-term oversold condition is resolved. The long-term indicators are still bearish. 1187.50-90.50 is a key zone. A move above it could lead GOLD to continue to challenge 1200-05 or a higher level up to the 1225-24 zone. …
The move past the resistance at 87.50 – 90.50 did move the price up past the 1200-05 area but failed to reach 1225. However that trade was profitable and there were also good profits available for swing traders who got short at Nat’s sell number. Here’s the annotated chart.
Based on weekly chart, GOLD bounced up to the middle of the long-term downtrend channel in past two weeks. It is likely for GOLD to move back up the top of downtrend channel if price breaks through 1235.50. A failure to do that could lead the price to retrace back down again.
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