I hope traders in paper gold understand that they are gambling. I also hope they understand that they are helping to add credibility to paper gold as a legitimate investment. I suppose one could look at this chart and say that if you are a buyer on the lower Bollinger band and a seller on the upper band, some bank credit could be netted. I do not find that dish to be particularly appetizing myself. The short term uptrend died today when the lower high from yesterday was confirmed. The chart is now short term neutral, with the intermediate uptrend still intact. I really see no compelling reason why price will not continue lower to the Bollinger band at 1671. Support is the swing low at 1667 and resistance is between 1714 and 1730 where the 18, 45, and 100 day moving averages are. I am a buyer again 1667 and will be buying 10 Maples. No paper for me, sorry.
Here’s the wider view. The coil is wound. Much is at stake for the paper hangers. Gold is priced by a market the paper hangers can move at will. Be warned, if you think that you can get the better of these people playing their game, you will be schooled. A break lower from this pattern will be ugly for carriers of long paper leverage, and a beautiful sight for physical buyers.
A break lower from the consolidation coil will setup a move to 1600 where the 45 week moving average and the Bollinger band are waiting. 1550 would be a true gift and would represent a move to the bottom of the long term trend channel. I will tap all available credit lines to purchase physical on a move to this level. Every day that you can still buy physical gold is a day that you can truly be thankful for. We are very lucky. Go hug somebody and enjoy the Christmas spirit.