Gold swing trades – week of Oct. 3, 2016

Last week

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Gold futures. Prices for week ending Sept. 30, 2016

Last week Gold moved down to fill in some of the air pockets left behind in the rally and returned to the short-term downtrend channel. The Fed Chair’s hawkish tone on Wednesday in House testimony – higher interest rates = increased value for US dollar = decreased value for gold – cooled down the buyers

Last week’s trades

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Gold futurues, week ending Sept. 30, 2016

Gold hit the high for the week Monday, but never touched the first resistance level or Nat’s first sell level.

Instead it broke through the Pivot and Nat’s key line early in Tuesday’s trading, proving a fairly clear entry point.

It dropped to both the first support and the first buy level by Thursday, giving an exit signal and a profit of about $16 — or $1,600 per contract — for a pretty easy trade.

Some of Nat’s traders doubled that profit by taking two additional trades that presented themselves, a bounce from the support/sell level that stopped and reversed just below the pivot. The total profit for both legs of that trade was an additional $20 per contract for a very profitable 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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The market is moving into the last quarter of the year. There is a conflict between long-term and intermediate-term indicators, so no wonder GOLD is struggling.

In the short term, Gold has been on the downside since it made a high in July. The Daily PMO is on a sell signal, and has been unable to move back to give a new short-term buy signal for a quite long time.

The short term support at $1310-$1300 has been tested three times before, and is likely to break down at the next test.

But the next support ($1280-75 and $1250-60) is very close and there is a big chance for GOLD to bounce from it.

The weekly PMO is on a selling signal and suggests there will be no rally in the near future. But the monthly PMO is on a buying signal. It prevents GOLD from having a serious correction.

$1260/1245 is long-term major support area. A decline to any of these levels will decompress the daily PMO. When we get a solid short-term buy signal, a quick rally should be expected.

Gold is likely to decline after speeches or comments by Fed members talking about rate hikes, which is currently the Fed’s preferred policy tool. But the banking crisis in Europe (and soon in the US?) may interfere to slow down the speed of decline.

In the long-run, the uptrend has not yet ended. But in the short-term, the $1400 level is clear overhead resistance. $1377.75 is likely the top area for this year.

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