As of writing gold is already trading at $1088.35. It would seem and judging from the ADX indicator that the force of downward moves is increasing which means we could be looking further downwards.
Our 10 Moving Average is already a long way away at $1118 so daily and weekly we have run out of our closest supports.
As you see I’ve thus drawn a support at $1050. However, that is the first lowest level I’m looking at. There could be supports in between.
From the 5-Day chart we see that the level around $1095 was taken out so another indicator which tells me we should look for a lower support.
So, what support remains there besides the $1050? Well, I’ve added two Fibonacci charts, one which has as start the latest rally which started late October and one which covers the entire rally from the beginning of September.
So, take your pick I’d say. Normally, when a stock retraces, traders look for a bounce from either the 61.8% or the 50.0% Fibonacci Retracement lines. So, only supports left would be found on the complete Fibonacci chart.
Just know that daily and thus short term, the downside has again inc
reased so take care with those long positions. Gold is not correcting on the rally from late October but it is correcting on the entire rally which started early September so $1050 would indeed be a great target.
On the weekly, the UP trend is still confirmed by the MACD, the ADX and the strong performance gold has had.
Not much more I can say here. I need to see the market perform after this day before I can second guess any further. One thing to watch is of course the dollar! I have absolutely NO frickin’ idea on what basis this thing is rallying but it probably will have some very vague reason??? If anyone knows please enlighten me.
Jim Rogers has the following to say :
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