Gold – 25 Jan

Yesterday the paper gold traders went bananas over the Bernank’s FOMC statement and tacked on a big gain for the day. In the pre-market this morning gold spot gold is up another $4 to 1715. Price actually closed above all 4 of the moving averages I track and at the Bollinger band on big volume. The Bollinger band is the only resistance between current price and the 1760 area. Former resistance at 1670 is now support. The 18, 45, and 200 day moving averages are also providing support in the 1650 area. Clearly the short term trend continues up and we need a major swing low to establish the intermediate trend line. RSI is approaching over sold status at 66, but clearly can handle a continued move to 1767. Stochastic is embedded (both lines above 80 for 3 days or more) and suggests increasing momentum. All pullbacks represent buying opportunities as long as the stochastic remains embedded. MACD is putting in a bullish cross of the neutral line. As long as the swing low at 1660 is not taken out, the short term stance is bullish with price both above the 18 day moving average and making higher highs and high lows.

The big white candle breaks the long term daily trend line.

Here’s the chart I really like to follow and as a buyer of physical gold. Let the paper players have fun with the daily chart and the whipsaws. An accumulator of physical should simply buy when enough dollars are accumulated for a purchase. If you are a reforming paper trader and still want to play a bit, time your purchases of physical to technically favorable situations on the long term weekly chart. Clearly anytime since the low of 1525 has offered a technically favorable opportunity to buy. RSI is just now coming off of long term support. Stochastic is now neutral and MACD is putting is reversing and setting up a bullish cross. Price is going back up to the top of the trend channel at 1800. Freegold is coming and price swings measured in the 100s will be meaningless to the ultimate physical gold price. When I can buy gold I am content. When I can buy it from a non-overbought position, I am pleased. When I can buy it from an over-sold position, I am ecstatic! I bought from 1650 all the way down to 1550, eating up my cash and finally using credit to snarf up as much as I could get my hands on. Now I will pay off the bank credit I used while price climbs.

 

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