Since reaching its recent high in late February gold has been tracking a basic downward path. It closed on Friday at a new reaction low. Is this to continue into a new bear market move or are we in for a reversal ahead?
GOLD LONG TERM
We’ve had an up move and a down move on that long term point and figure (P&F) chart shown last week but other than that there is no change to its message. It is still in a BEAR mode with a projection to the $705 level.
As for the normal indicators, those also haven’t changed although they are getting very, very close to a reversal signal from their present bullish rating. The price of gold is sitting right on top of its still positive sloping moving average line and the momentum indicator remains in its positive zone. The momentum indicator is, however, only very slightly above its neutral line and heading lower below its negative sloping trigger line. Another down week in the price of gold and most likely we will see these indicators go negative. The volume indicator continues to move in a basic horizontal direction with a slight negative bias. It is below its negative sloping trigger line. However, looking at all the indicators the long term rating continues to be BULLISH but in a very, very precarious position.
INTERMEDIATE TERM
Everything on the intermediate term just keeps getting more negative. The price of gold is moving further away from its intermediate term negative sloping moving average line and the momentum indicator has once more moved into its negative zone below its negative sloping trigger line. The volume indicator continues to drift slightly lower below its negative sloping trigger line. Finally, the short term moving average line is moving further and further away and below the intermediate term line. We have consistently seen that a trend reversal has a rough time as long as the short term moving average line continues below its intermediate term line. On the intermediate term the only rating I can give is a BEARISH rating.
SHORT TERM
When we have the very short term moving average line (8 DMAw) below the short term line, and heading lower, it’s a good guess that the short term direction is not to the up side. Gold tried to break above its short term moving average line during the week but failed. It is once more moving lower, below its negative sloping short term line. The short term momentum indicator remains in its negative zone where it has basically been for about the past two months (except for a very brief period in mid-March). The daily volume activity has been very low recently but I expect that will perk up shortly. On the short term the rating continues to be BEARISH.
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