COMEX Gold - To Break or Not?

Price is moving higher, both in the short and longer term basis, though price right now is facing resistance at 1500 psychological level. The longer term trend of price is still up as it is above its weekly moving average (chart 3) and the 2- year uptrend line is still intact (chart 2).

In the shorter term, price is trending up as it continues to make sequence of higher high: 1450, 1480 and 1500. Price is also above its moving average. Do note however, RSI showed that upward momentum has weakened in the past few days (chart 1).

It is clear that 1500 is the immediate resistance, given the round number which also confirmed by price action, where price consolidated between 1488 and 1500 for almost 2 days now. Therefore, expect price to trend in the direction of break.

Given the trend, price is expected to break above1500. Daily stochastic is still signals buying mode (chart 2) and the recent consolidation can be seen as easing the shorter term overbought condition. Nonetheless, the level could be hard to break and may require further consolidation. If that is so, the break and close below 1488 should be the first sign. Further support expected at 1477, a prior high and recent RSI oversold level (chart 1), and recent lows of 1450 and 1410.

Do note that the Gold producers’ index has yet to confirm the new high set by gold. A close above 600 would be great for the uptrend, adding to the already confirming silver. A failure to close above 600 could be a cue for a strong resistance at 1500.

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COMEX Gold - Looking for Intermediate Term Bottom

Price is weak on the short term basis but is still on a long term uptrend. However, intermediate term bottom could be in the making.

On the short term basis, price is still making lower low and is below its 100 period moving average and its downward trendline (chart 1). However, on a longer term basis, uptrend should still be in place as the long term uptrend has yet to be violated (chart 2) while intermediate term low of 1160 still holds (chart 3).

Nonetheless, price could be making an intermediate term bottom as:

1) approaching long term RSI support of 35;

2) price made a measured second move down, second downleg was of same magnitude of the first (chart 1) and

3) sentiment seems to mirror prior intermediate bottoms, open interest waning and commercials are less bearish.

But for such bullish scenario to occur, price has to show strength in the short term by trading above the moving average and the downward trendline, and preferably trading above the support resistance level of 1354. Otherwise, expect downward pressure to continue.

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COMEX Gold - Finding Bottom?

Price could be making a swing bottom within the bigger picture uptrend. On longer term basis, price is still on uptrend as:

1) Price is still above October low of 1315/1320

2) Despite below the moving average in daily chart (Chart 2), the average itself has yet to turn down.

Meanwhile, the short term sell off appeared to lose steam. Price has broken the steep downtrend while a few observations suggest support is at hand:

1) Price is holding above support area, red lines on chart 1,

2) Price on RSI oversold level on Friday was higher than previous oversold level on the 16th (chart 1).

Still if bottom is to occur, price has to break above the 3 day old resistance level around 1365 to confirm the bearish bias. But if price trades below low of Friday of 1343, sell off may resume with a price below 1315 confirming the sell down.

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