Gold closed the week just about where it started around the 1755 level, only this time that price level represents support rather than resistance. Yesterday’s high has proven to be a swing high by virtue of the lower close today following lower intraday price. So resistance remains at 1770 and support is coming from the 45 day moving average currently at 1720. Further support is coming on up from the 18 day moving average which should be very close to the 45 day MA on the open Monday. Finally the swing low represents the final layer of support that must not be breached in order to keep the up trend intact.
Stochastic is embedded (3 days above 80) and any pullbacks from the Bollinger band should be considered buying opportunities since the indication suggests increasing underlying strength. For traders, a long entry would technically not be wrong until the 1680 swing low is taken out. A decent trade might be to put in a limit buy near support at 1720 with a stop just below and stop just below the last swing low at 1680. Of course Freegolders and investors can simply buy and then go out and rake the yard. Gold is going much higher and $200 per ounce is meaningless.
A intermediate trend looks to be materializing and I have put up a new uptrend channel on the chart in green. If price goes all the way down to the swing low at 1680 we will be still be within the trend channel.
Just a note: some friends have suggested that I am never “short” gold and I do not speak specifically about short trades. This is true because I do not trade gold once I buy it, and I buy physical. I could put on short trades and speak of short setups on the chart, there are plenty. But I would hope that followers of the charts would be learning to chart on their own to learn the skill and eventually quit trading gold. There will be a day when gold is free where working a good chart will again mean something again in such things as stocks. I intend to maintain or improve my charting skill for that day. Besides, all you do is take the opposite of the principles I show regarding trend, over-bought/over-sold, and risk moderation with entries and stops.