Gold – 11 Jul

Gold continues a stealth move that was tough to catch. I bought today because I couldn’t stand being out of the market. I see risk in this market and it is being stuck in cash as gold melts up. The beauty of gold is that if you trade without leverage, and you take a chance buying late in a move, if it goes poorly you just hold. Gold is going so much higher in time it renders concern over temporary reversals irrelevant. Price is approaching resistance at 1555 with support coming from the 18 and 45 day moving averages near 1520. With the shit hitting the fan in Europe and gold setting all time highs in numerous currencies, this test of 1555 may be the deal breaker for the gold bears. Technically, this chart is neutral with a lower low and and higher high. We need a swing low above 1478 to give a defined uptrend made from a higher high and a higher low. I think this is a technicality and we are most assuredly seeing an uptrend in progress. Stay away from leverage in this case because a buy here is not wrong until 1478 is taken out. If you are going to buy, buy physical and hold if the breakout does not materialize. I like PHYS in this situation, see below.

The longer term chart shows gold posed for a breakout higher into the the favorable seasonal for gold. With everything happening it is difficult to imagine any material reversal in gold. The question going forward is how far can price fall before the buyers come flocking in. 1475 appears to be the limit at this point. The last congestion zone comprised a band with around a hundred dollars from high to low, very similar to our current sideways channel. Also, notice how price broke from the low in July of 2010 and ran uninterrupted for nearly $200. This was the favorable seasonal period of late Summer/Fall. I believe the next move is to 1600 and we may see 1800 before the end of the year.

PHYS, the real and 100% allocated gold fund, is right at resistance around 13.68. MACD has put in a bullish cross of both the signal line and the zero index level. Stochastic is not quite over-bought but will be there tomorrow if gold maintains its strength. RSI could close just under over-bought range with a close above resistance. The trend is technically neutral with a higher low to go along with a lower high, but just barely. The lower high only missed by .02. Tomorrow a swing above 13.73 will make the uptrend official.

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This entry was posted in Gold, Matrix Sentry TA, PHYS, Technical Analysis. Bookmark the permalink.

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