Gold closed down again and in doing so penetrated support at 1515. The next layer of support comes in at 1486. But, the Bollinger band will provide support in the interim. The chart has has definitely taken on a bearish slant with price noe below the 45 day moving average. The 100 day MA is coming up to help with support between the 1475 and 1485 level. the line in the sand appears to be the 1473 level and if it falls, a move to long term trend support would likely be afoot. the next chart will show this critical level in context.
1473 is critical support and a breach there will likely set up a move to the former trading zone breakout level of 1425. This would be very near or at the 200 day moving average. This moving average has time and time again provided the floor for gold corrections for the past 10 years. I expect it will do so again in the event we head for 1425. This area correspond to the bottom of the year long uptrend channel depicted. In reality, I think a the 100 day moving average will prove to be rather strong support and might just put an end to the correction.
The weekly gold chart shows both the 1473 and 1425 level in context with the long term trend from the 2008 bottom. This move in gold is a sight isn’t isn’t it? During this move, we haven’t violated a swing high to the downside on any correction. 1425 appears solid and would correspond to the bottom of the weekly trend channel. Can you say buying opportunity? 50 on the RSI appears to be the floor, as well as 20 on the MACD study.
Phys is slightly outperforming gold and has taken on a a couple of percentage points in premium as a result. Where gold has penetrated support, PHYS has just met it 13.17. While minor support exists at 13.01, more solid support is found between 12.40 and 12.58. Before those levels, the Bollinger band will work to support prices and contain price within the bands. Current price is sitting on the 50 day moving average and the 100 day moving average is climbing and will support price with a move below 13.0. The 200 day moving average is just showing at the bottom of the chart and will be providing extra support for the already stout 12.50 area. This area would represent a bargain for new positions in PHYS. As far as current positions, the big gap off the swing high will fill so why worry about any short term loss in PHYS?
The longer term chart shows price approaching the lower limit to the longer term uptrend channel. Strong Fibonacci support lies at the 13.0 level. Also, the 12.38 level is very strong chart support as well as the Fibonacci 61.8% support level. I see 12.38 as a solid floor for any prolonged correction in PHYS.