The jobs report was released this morning and in a single word, it SUCKED. I was laughing my ass off listening to the clowns on CNBC express their shock and dismay that the “rough patch” may be something more serious. YGTBSM! Rick Santelli is the only one with a clue on that network and he had a rather smug expression on his face.
Gold immediately caught a bid and went from a few dollars down to 13 up. This pop is the gut reaction that further stimulus is a certainty now that “rough patch” is revealed for what it really is, smoke and MOPE. Do not be fooled by the talking head media, this isn’t a rough patch, or a double dip, or browning green shoots, or any other nonsense other than the truth, this is the continuation of a global depression that is going to fundamentally change your concept of money.
Thank you stockcharts.com! Intraday price info is back and therefore we can see the continuous contract gold chart depicted with candlesticks. The gold chart shows price climbing to resistance and the top of the sideways trading channel. Currently gold is trading at 1542, so the upward impulse continues. Resistance is coming in at 1555. A break above this may be saying the summer doldrums are over and the fall rally is commencing. Support is coming in around 1520 where we have both the 18 and 45 day moving averages, along with chart support from swing highs and lows. Very strong support is all the way down near 1475, the bottom of the trend channel. The trend is technically neutral with a lower low and higher high. A swing low above 1478 locks in a short term uptrend.
The weekly chart shows price finding support once again at the 18 week moving average. If the pattern continues, then the low for this move is in and we will be setting a new high shortly. 1555 is the line in the sand, get ready.
PHYS, our real and 100% allocated gold fund, is climbing to resistance at 13.75. This is the level equivalent to 1555 in gold. A breach of that level is a signal that we are likely heading much higher. Support is coming in the 13.15 – 13.25 range where we have chart support plus the 20 and 50 day moving averages. Another gap has formed to join the small gap at 13.10. Also, there remains a gap all the way down around 12.75 and that is troublesome to me. Gaps on low or mediocre volume nearly always fill. It is why I missed the last buy opportunity, my buy limit was in the gap and it was never triggered. A new uptrend is now painting the chart with a higher high and a higher low around 13.25 in place. If 13.73 stays intact, then the pattern returns to neutral.
Here’s the longer term chart showing strong Fibonacci support at 12.98. A move to the 12.68 level, the Fibonacci 50% retrace, would fill the gap at 12.75.