GOLD broke the $1300 level last Monday, but the profit-taking followed quickly and pushed the price back down to test April’s breakout level at $1270. Nevertheless GOLD successfully prevented the price from falling and closed near its weekly open.
Last week’s trades
There were decent trades available last week, but the prices never reached Nat’s sell level ($1316), so entries were discretionary.
Traders who were able to recognize the half-hearted head and shoulders pattern on the 60-minute chart, or the spike high Tuesday as the high of the week, were able to use Nat’s pivot level as an exit point.
Later in the week the same pivot served as a springboard for a nice rebound back up to the opening level, a move that was worth about $20 per contract.
But while Nat’s inflection points provided good guidance for independent traders, they didn’t provide the outstanding entry levels they have in the past. There was a lot of volatility and a lot of price reversals that shook traders out of good positions. Good opportunities, but tough to get and keep.
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The minor pullback hasn’t completed yet. This week GOLD can still pull back down further near the $1260 level to test the 20-day moving average line before it bounces again.
$1262.30-64 is a key zone. If that support level is broken it could trigger sell stops and push GOLD down toward the 50-day moving average line.
The US dollar is setting up for a short-term rally and Gold hit 1300 resistance. In the short-term, it could push GOLD into small correction.
But the USD and Gold do not always move in opposite directions. GOLD may well hold up above its daily momentum support lines by going sideways and then rally again later .
Long-term and intermediate-term outlook for GOLD is bullish. The chart for the longer-term still suggests GOLD will move higher. There are shorts waiting above $1300; once they are frightened out of those positions the next upside target will be $1340-50