Gold – 3 Nov

Gold continued higher and closed above resistance at 1754, just shy of strong resistance around 1775. The up trend is confirmed with a higher high to go along with the higher swing low at 1680. Support is now the 45 day moving average under current price around 1721. RSI is showing a moderate increase now to 61 and still has enough room to run higher without being technically over-bought. Stochastic while over-bought above 80 has been above that level for 3 days or more and is embedded, indicating increasing momentum to the upside. As long as both lines stay above above 80 it suggests pullbacks are buying opportunities for potential moves higher rather than reversals.

Traders should be happy with longs entered as stops below the last swing low are now far behind. The next objective is the sale level. Moves above the Bollinger band are good opportunities to reduce position, looking to re-enter on pullbacks back within the band with the stochastic still embedded. Outright liquidation for the more conservative could be executed on a loss of the stochastic embed. The trend is alive until the swing low at 1681 is taken out, so the more aggressive can hold on until that level to prevent any whipsaws and potentially carry the greatest profit. Of course Freegolders can go play a round of golf and not worry whatsoever about profit objectives or stop losses.

The nonsense playing on MSM, bailout on, bailout off, bailout on, bailout off, G-Pap toast, G-pap staying, referendum on, referendum off, etc can only be constructive to the rational flow of capital into gold. I like a move above 1775 and then a pullback to re-test resistance then turned to support.

The expanded chart shows price just shy of the Fibonacci 61.8% retrace level, a natural area of resistance that adds to chart resistance and makes the 1175 area a significant barrier.

The weekly chart gives shows price again above the upper line of the trend channel. Stochastic has just completed the reversal and has all kinds of room to run before getting to over-bought levels. The same with RSI. The trend is intact with another higher low at 1550 and this chart will not lose its bullish stance unless a lower swing high is established below 1920, and then it would only make the chart neutral. I think the correction was overdone in time, not necessarily price. We may need to make up for this artificial compression by extending a period of consolidation. I would not be surprised to see a consolidation triangle form that takes through the first couple months of 2012. This base will allow another big push beyond 2000.

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

2 Responses to Gold – 3 Nov

  1. Chuck Ball says:

    Thanks for the work Ron.

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