Gold trading targets long term looking at the monthly and boiling it down.
A quote from Greenspan this past week: Greenspan told the Council of Foreign Relations that the Fed’s $4 trillion balance sheet is a “pile of tinder, but hasn’t been lit.” Once the central banks stop “sitting on” their reserves, said tinder will ignite, “inflation will eventually have to rise,” and in turn, “gold will move higher, measurably so.” FXstreet
Problem is with all Ponzi’s the bigger they are the longer it takes to fall. So don’t look for the Dollar to disappear this year…maybe.
Gold trading on a monthly chart looking for support in this bearish channel.
The targets on the bearish channel could break the $1000 psychological support. This is where the real sell off could occur. But let’s look at the monthly chart to see what it reveals.
Last month we have a sell shadow that shows that the sellers are still in control and continue in the direction of the general bear market. There is no relief in site as the increase in volume is not capitulatory and there is no real support until 1090.
We might chop around in this area 1135-1160 until sellers start to panic or buyers see opportunity. The only way I see this happening is through politics and geopolitical mishaps rather than basic market fundamentals.
“trend is your friend” could not be stressed more and the volatility in gold should keep the beginning trader out of the product.
We can see the major support has been broken at 1160 and are watching for a weekly close above it.
We have a volume increase on the last week of selling and watching for this weeks volume levels. It seems there is above average volume with some momentum to the downside.
The volume of gold trading on the weekly chart has not shown any significant commitment or exhaustion. Watching for a level that breaks 500K on a weekly for a change in direction
As you can see on the red diamond, there might be an exhaustion point and time for a reversal.
A projected move to 1128-35 for support with a close on the trend line is a likely target if sellers keep it up. Watch for volatility into news.
Gold trading on a daily chart.
Last week we had a large move on seller volume as the JPY started their quantitative easing and pushed money towards equities. This started the next move which broke gold under the 1198 support which it had tested and failed previously to break.
Gold is staying with in the bearish trend lines and we might see a Retracement back towards the 50 moving average as sellers exhaust. Expect to see resistance at 1160, 1178, and 1198.
Gold would have to close above the 1202 on multiple time frames to invalidate this next price projection to new lows. Supporting trend line is the key.
Will update late. Watch out for volatility, minimize your risk and don’t trade gold if you are not familiar with the market. Never listen to anyones advice and be responsible for your trading. If you don’t have a written strategy, don’t trade.