The violent chop in gold continues as the forces of MOPE (management of perceptions economics) pull levers, spring booby traps, and open trap doors to flush the long gold trades. They do this to target the weak speculative long that does not believe the fundamental argument enough to withstand the clumsy manipulative effort. This lack of belief is born in ignorance and can be cured with knowledge. If you are playing the gold market because someone you trust says it is a good idea, you are doing yourself a disservice and you will be harmed in this market if you insist on trading. For those that will buy and hold, your risk is that you will quit buying when price is correcting lower, when you need to accelerate buying.
Gold closed down after making a higher high than the day before. The 1820 level has been holding now as support for 6 trading days and as of this posting price appears poised to violate support with the current price of 1801 in trading before the NY open. So the next layer of support, the critical one IMO, is 1794. A failure there sets up a move to the Bollinger band and the Fibonacci 38.2% retrace around 1750. Resistance is technically the last swing high at 1889, but in all likelihood will change to the swing high made at 1850 provided a lower high is put in today. All technical studies are dead neutral and are of little help. Volume is declining as price drifts lower, a good sign that downside enthusiasm is lacking.
I see PHYS as the only alternative for those who have money in retirement vehicles such as 401ks or other employer sponsored retirement accounts. PHYS is a closed ended bullion fund where all the gold is held in allocated storage, where there are no other counter-parties that can claim ownership of the gold. For those who want to trade without leverage, I offer the chart with support and resistance annotated. For those who buy and hold, literally any price is a good time to buy. I believe all money that is saved outside of structured retirement vehicles should be allocated to the acquisition of physical bullion in your possession.
Strong support is forming at the 15.74 level with layers of resistance above at 16.24, 16.48, 16.70, and finally the all time high at 16.86. The 18 day moving average has been supporting price for sometime now and is currently at 16.0. If price continues this sideways chop it will approach the lower support line of the Andrew’s Pitchfork which will also be around 16.0. It appears to me that 16.0 may be as good as it is going to get for the value hunters looking for an entry. This chart is bullish in the intermediate and long term, while neutral in the very short term a higher low and lower high. The technical studies are all neutral and illustrate that this chart is ready to move. I think it breaks higher to new all time highs.