Gold swing trades – week of July 13, 2015

Last week

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Gold futures prices, week ending July 10, 2015

Last week GOLD almost reached its March low, missing by only four dollars. The Greece and China crises seemed not to change the GOLD outlook very much.

That’s a little surprising. For a second week gold has under-performed, despite the kind of financial news and external events — Greece, China, computer “glitches” that took out the NYSE, United Airlines, and the Wall Street Journal simultaneously — that usually would have traders stampeding to the nearest bomb shelter. Gold’s traditional function as a hedge against bad news is being called into question. Either that or the two entities that now dominate the precious metals derivative markets —   JP Morgan and Citigroup — have found a way to keep prices stable in bad times.

However there were a couple of profitable entries last week that demonstrate to value of gold futures as a trading vehicle. The price never reached our key line, but the drop below the weekly pivot level on Monday was a good signal to get short and there were opportunities to sell up to the $1170 level.

When the price subsequently dropped to Nat’s first buy level at $1147 many of our traders reversed the position for a nice little bump into the close. There was about $22 per contract available on the way down and about $12 per contract available on the bounce back up, or about $3,400 per contract for the week. Not everybody got all of it, but most traders got at least some.

Here’s the annotated intraday chart. Gold Futures to July 10, 2015, 60-minute bars. Click to enlarge.

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This week

Member content

Here is the member content for this week. Download the full analysis with the buy/sell numbers here: 150713-gold-plan

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Gold futures, weekly chart

GOLD has been on the downside for more than three years. Right now every time-frame we consider is bearish. In the short term we may see an oversold bounce, but the intermediate- and long-term outlook will remain bearish. The trend will remain down for a while.

Even dramatic external events – the market crash in China, the turmoil in Europe – have not raised the demand for GOLD yet. However there has been a huge increase in the number of precious metals derivatives circulating and this will keep GOLD prices low or lower for a while.

On the weekly chart the range for the triangle pattern will be 1235 -1140. The 1206 area will continue to be the current major resistance line and 1140 becomes the current support line. The 1168-65.50 zone turns into this week’s control zone.
A move above 1175 could push GOLD back up but the advance – if it occurs — will be disrupted by selling.

However GOLD may break the 1140 level this week and go lower to reach the 1130 zone and shake out the weak hands and frightened buyers.

For the long run, the full measurement for the long-term downside target will be 1045-35, This will remain the active target as long as the price stays below 1200.

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