Gold swing trades – week of Nov. 21, 2016

Last week

161118-gold-prices

Gold made a continuation low move last week. It spent the early days of the week consolidating the previous week’s decline, then dipped lower on Friday. But it managed to hold the price above the $1200 level.

Last week’s trades

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Gold futures, Nov. 18, 2016. 60-minute bars.

There were few good opportunities for gold traders last week. After the spectacular moves in the previous week (see this) the market was consolidating in a fairly narrow trading range for most of the week, with few obvious entry levels.

Nat said in last week’s gold outlook that:

Shorts can sell on bounce at major resistance zone, buyers can buy near neckline with protective stops.

and that proved to be correct, but hard to trade.

The price touched the neckline only briefly in Friday’s pre-market trading (although it made a nice bounce, as she predicted) but it would have been difficult to catch that entry unless you were using resting orders. Not much movement and not much profit for gold traders this week.

This week

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This section contains the specific buy/sell levels for this week. It is reserved for paid subscribers. Previous weekly swing trades are available free of charge in the archives.

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Gold futures, Nov. 18, 2016. Daily chart.

It is very clear that the bearish H&S pattern took control of last week’s GOLD movement. The neckline at $1200-1190 zone will act as a key zone for this week. Holding above this key zone will give GOLD a chance to have an oversold bounce in the very short time-frame. But the bounce will not change the downtrend direction.

$1250-1270 is a major resistance zone for this week. As long as GOLD doesn’t close above it, we will continue to see sellers entering the market.

The recent strength in the US dollar will continue to pressure the GOLD price. Anticipation of a Fed rate hike next month will also lead investors to sell GOLD. The price could go down further until the Fed rate announcement in December.

The long-term trend is bearish, but not oversold. Short and intermediate time frames start to have an oversold condition.

A brief bounce is likely but until the long-term indicators get oversold any bounce will not last long. Any bounce in the early days of the week will be pushed back down by new sellers and should be assessed as a trading opportunity.

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