Gold - The air is getting very thin
Updated
After breaking through the six year downtrend-line in the last week of July the gold price continuously gained momentum and was finally able to break through the strong resistance zone around 1,300 USD in the last week of august. This super bullish breakout fueled the rally in the last 10 trading days and gold has now reached my first target zone around 1,350 USD.
Between 1,345 USD and 1,355 USD gold is meeting a strong cluster of resistance in a very overbought fashion. Although prices are still climbing along the upper Bollinger Band (1,355 USD) on the daily chart they are way above the weekly Bollinger Band (1,330 USD). Yes, you can see up to five sometimes even seven candles above or below these bands in a row but this is very unusual and probability clearly speaks against any immediate more upside.
On the positive the daily stochastic is bullish embedded which has the uptrend locked in as long as both lines of the oscillator remain above 80. But on the 4h chart I have spotted a growing negative divergence meaning the stochastic oscillator is not confirming the recent new highs anymore.
I would be surprised to see gold close the week above 1,350 USD. Instead I think we might witness a first wave of profit taking rather very soon.
If instead gold can continue to climb the next target zone sits between 1,370 USD and 1,380 USD. Yes, even a quick intraday spike towards 1,400 USD is possible but in my humble view very unlikely here.
My advise is to tighten your stops (at least 1,334 USD) and wait for the next larger dip which should bring gold towards or even below 1,300 USD again.
After a pullback we might see gold moving towards 1,380 USD which could be the final 5th wave of this rally followed by a larger and more complex correction/consolidation.
Until spring 2018 I still expect gold to move towards 1,500 USD.
Between 1,345 USD and 1,355 USD gold is meeting a strong cluster of resistance in a very overbought fashion. Although prices are still climbing along the upper Bollinger Band (1,355 USD) on the daily chart they are way above the weekly Bollinger Band (1,330 USD). Yes, you can see up to five sometimes even seven candles above or below these bands in a row but this is very unusual and probability clearly speaks against any immediate more upside.
On the positive the daily stochastic is bullish embedded which has the uptrend locked in as long as both lines of the oscillator remain above 80. But on the 4h chart I have spotted a growing negative divergence meaning the stochastic oscillator is not confirming the recent new highs anymore.
I would be surprised to see gold close the week above 1,350 USD. Instead I think we might witness a first wave of profit taking rather very soon.
If instead gold can continue to climb the next target zone sits between 1,370 USD and 1,380 USD. Yes, even a quick intraday spike towards 1,400 USD is possible but in my humble view very unlikely here.
My advise is to tighten your stops (at least 1,334 USD) and wait for the next larger dip which should bring gold towards or even below 1,300 USD again.
After a pullback we might see gold moving towards 1,380 USD which could be the final 5th wave of this rally followed by a larger and more complex correction/consolidation.
Until spring 2018 I still expect gold to move towards 1,500 USD.
Note
Here we go, gold down 9 USD from today´s high already.. let´s see. I think we´re getting the pullbackNote
Gold only slowly moves lower.. character doesn't seem too bearish yet.. as it looks it will close the week above the weekly bollinger band...Note
and that means bulls are still in control. Embedded bullish stochastic on the daily chart has not been lost and 1h chart is oversold... looks more and more like the bull are not finished yet...Note
Gap down and now very oversold on the 4h chart too... not the best setup for a short here.. I guess gold will behave difficult over the next couple of days. anybody who missed the entry above 1,350 has to be patient now.. sidelines is the place to be..
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