Updated Weekly Gold Chart

July 22, 2012

It can be seen from the first chart below that there is now no more room for indecision. Breakout (up or down) must happen this coming week. Note falling volume as price floated up over the past 7 weeks. If you examine the second chart carefully, you will see that gold moves in a 12-14 week cycle (3 months) - which is probably related to the gold mines reporting cycle.

It can be seen from this chart that the current cycle is reaching for a peak and that the next cyclical move is likely to be down. There is evidence of some unusual behaviour (some would call it manipulation) of "normal" market forces in the immediately preceding cycle. Price moved sideways in the up phase and down and up (net sideways) in the down phase. It then moved essentially sideways in the most recent up- phase of the current cycle - which is due to culminate this coming week.

Technically (unemotionally) the "strange" behaviour in the most recent preceding cycle may be evidencing a change in underlying sentiment rather than "manipulation".

Whether this change in sentiment is shifting towards the bullish or the bearish remains to be seen. No definitive call can be made. However, the "circumstantial" evidence (which would not be admissible in a court of law J) is pointing to the higher probability that the direction of the break will be down.

What is this circumstantial evidence?

  • Downward pointing 20 week and 40 week MA
  • Gold price has tried five times in the past seven weeks to penetrate above the Fibonacci resistance semi-circle - and failed.
  • Gold price has tried five times in past seven weeks to penetrate above the falling trend line - and failed
  • Descending bearish right-angled triangle
  • Contracting volume as prices floated up in the weeks of the up-cycle and failed to overcome resistance.
  • Falling tops of the RSI, which has not yet reached an oversold position

 

Brian Bloom

Author, Beyond Neanderthal and The Last Finesse

www.beyondneanderthal.com

 

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The King James Bible mentions gold 417 times. Not once does it mention a paper currency.

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