Gold – 11 Jan

The gold chart looks to be in transition. Price made it to and closed above the resistance of the 200 day moving average, an important technical level that separates the bull and bear camps. The short term up trend has been confirmed by virtue of a higher high to go along with a higher swing low near 1605. Price is above the 18 day moving average and sets the stage for long trades where one could buy here with a stop just below 1600. If price goes below that level the short term trend becomes neutral and suggests a swing trader should be out of all trades until a trend materializes.

Stochastic is over-bought. Another day above 80 and it will be embedded, indicating strengthening momentum that nullifies the over-bought indication. RSI is just above neutral at 52 and has enough room to run for the 45 day moving average. Until that point, price will find resistance at the the upper boundary of the Bollinger band. Today price made it to resistance at 1643, then closed lower. So resistance remains 1643, then the 45 day moving average at 1677. I will feel comfortable that the intermediate downtrend is over if price closes for a 3rd day outside of the trend channel and closes above 1643.

The expanded view shows how far we have to go to see the 4 month old down trend neutralized. RSI is breaking above the trend line and MACD is approaching its trend line.

The weekly chart still shows gold trending up as it has since 2008. The support level on RSI largely held with just a slight overshoot. Stochastic suggests we are on the way to a sustained bullish period. I would think the road is open for a move to the top of the trend channel, which is near the 1st level of resistance at 1767.

 

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