Into Support for a Test
A lot of thought and research takes place throughout each week and weekend in order to publish the best newsletter possible. Yesterday’s was no exception. We presented bullish and bearish thoughts on gold and those still stand. However, one chart, an important one, was left out so it’s presented here this morning.
Just suppose that gold simply wants to test a long term trend line which it has yet to do? What if that test involved a slight undercut of the last pivot low and potential price rejection?
Let’s examine a weekly chart. What we’re about to speculate will require a stop to be loosened a bit as well as waiting for a weekly close. Along with that, keep in mind that we think the U.S. Dollar is going to test out the 80 area, perhaps rise up thru it and possibly fail at that point.
A symmetrical consolidation has formed in an uptrend. Resolution usually, not necessarily, involves a continuation of that trend. Price has yet to test the rising green trend line. If the trend line were tested this week, price could reach underneath $777.70 a slight bit. That would set up the possibility of a price rejection on lighter volume. That would be a powerful reversal candidate.
Unfortunately, there isn’t a positive MACD histogram divergence present. But, there wasn’t one present for the 2006 test of support at $563.50.
Naturally, nothing is etched in stone and one must keep an open mind that a failure of support could also be on deck. We just wanted to present our thoughts that it’s possible that gold finds a bottom soon.