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Here's a bit of charting mumbo jumbo that suggests gold could be about to recover. If you aren't into charting I'd probably suggest you not bother reading the analysis.Gold hasn’t done me any favours recently. When GLD fell to a long-term support (blue dashed diagonal line) and then rose to break a weekly downtrend I saw it going higher and bought into a couple of gold stocks (NCM and EVN). Price rose to $1,900 making a new technical weekly uptrend in the process before rolling over and falling back heavily. I held on the basis price should kick up if/when it reached that long-term support line, however, price fell through said support by 4.5% to stop at the next support level below (around $1,680). Last week it moved up to close above that support making me a little more confident of the outlook for the precious metal.Technically, price has not made a new weekly downtrend in the recent fall, so by definition it remains in an uptrend – another positive.The week before last made a hammer candlestick which is a reversal candle when at the bottom of price action. The closing price for GLD has risen for the past 2 weeks (although last week was only up $1).Elliott Wave Theory, while always a bit subjective, suggests that if the low of 2 weeks ago was a significant low then price is probably on Wave 5 which, if correct, means price should go back above the August 2020 high of $2,080. The recent rise to $1,900 and pullback to $1,680 could be Elliott Wave sub-waves 1 and 2, and if so, price could now be expected to rise strongly in sub-wave 3 until a theoretical pullback around $2,070 (a 161.8% Fibonacci extension of sub-wave 1 from the bottom of sub-wave 2). $2,070 is very close to the all-time high for GLD which is a significant resistance level that could cause the pullback mentioned.Finally, Time Theory suggests price may change trend when it meets a time line. Time Theory is a bit Dr Whoish and even more subjective than Elliott Wave. While I don’t regularly use it in my day-to-day trading, it is always in the back of my mind. GLD seems to travel to a 72 days cycle. The vertical lines on the chart are 72 day cycles and while price hasn’t changed direction at every time line, it did at 8 of the last 9 time lines prior to the one that coincides with the low 2 weeks ago. Again, this suggests price is likely to move up.[ATTACH=full]129274[/ATTACH]
Here's a bit of charting mumbo jumbo that suggests gold could be about to recover. If you aren't into charting I'd probably suggest you not bother reading the analysis.
Gold hasn’t done me any favours recently. When GLD fell to a long-term support (blue dashed diagonal line) and then rose to break a weekly downtrend I saw it going higher and bought into a couple of gold stocks (NCM and EVN). Price rose to $1,900 making a new technical weekly uptrend in the process before rolling over and falling back heavily. I held on the basis price should kick up if/when it reached that long-term support line, however, price fell through said support by 4.5% to stop at the next support level below (around $1,680). Last week it moved up to close above that support making me a little more confident of the outlook for the precious metal.
Technically, price has not made a new weekly downtrend in the recent fall, so by definition it remains in an uptrend – another positive.
The week before last made a hammer candlestick which is a reversal candle when at the bottom of price action. The closing price for GLD has risen for the past 2 weeks (although last week was only up $1).
Elliott Wave Theory, while always a bit subjective, suggests that if the low of 2 weeks ago was a significant low then price is probably on Wave 5 which, if correct, means price should go back above the August 2020 high of $2,080. The recent rise to $1,900 and pullback to $1,680 could be Elliott Wave sub-waves 1 and 2, and if so, price could now be expected to rise strongly in sub-wave 3 until a theoretical pullback around $2,070 (a 161.8% Fibonacci extension of sub-wave 1 from the bottom of sub-wave 2). $2,070 is very close to the all-time high for GLD which is a significant resistance level that could cause the pullback mentioned.
Finally, Time Theory suggests price may change trend when it meets a time line. Time Theory is a bit Dr Whoish and even more subjective than Elliott Wave. While I don’t regularly use it in my day-to-day trading, it is always in the back of my mind. GLD seems to travel to a 72 days cycle. The vertical lines on the chart are 72 day cycles and while price hasn’t changed direction at every time line, it did at 8 of the last 9 time lines prior to the one that coincides with the low 2 weeks ago. Again, this suggests price is likely to move up.
[ATTACH=full]129274[/ATTACH]
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