Gold Update November 2015 (D)
Created on Saturday, 14 November 2015 04:41
Written by Austin Galt
Gold is right back at major support from the yearly low so let’s update the daily chart.
GOLD DAILY CHART
Price put in a low this past week at $1173 which makes a double bottom with the July 2015 low of $1072.30. Double bottoms generally don’t end trends but there are of course exceptions and the expectation anyway is that after a significant bear rally price will come back down and head to new lows.
While I don’t expect the downtrend to extend and gain momentum, one possibility is price makes a marginal false break low before reversing back up. Personally, I favour this scenario now with price in its current position.
Whichever scenario takes place, a double bottom or false break low, the bear rally will likely be on once an identifiable impulse move higher is seen. The other scenario, a downtrend extension, is of course possible but it just seems too obvious.
The move down in the first part of this month has brought back into the mix the broadening low formation outlined in previous analysis. Just when the market got me thinking I was wrong about this is the exact time it played out. Typical. The market is just one big deception which always needs to be at the back of one’s mind.
So, we have a point 5 low in place or likely to be shortly while this also looks to be a point 4 low in an even bigger 5 point broadening top. This, of course, is also part of the 7 point broadening top formation shown in previous analysis and while I thought the July 2015 low was the point 6 low it is possible it is still in front of us.
So once again these broadening top/low formations continue to pop up which is just a demonstration of patterns of human behaviour continuing to repeat themselves in different time frames and different markets.
The Bollinger Bands show price has moved away from the lower band and it is possible for price to have one last lash at the lower band or head up to the middle band and beyond.
The bearish Fibonacci Fan shows several angles already providing support and resistance. Price is now bang on support from the 38.2% angle and while it is possible for price to dip slightly under I expect this is where the expected rally will now launch higher from.
The Stochastic indicator is bullish.
The MACD indicator is still bearish but threatening a bullish crossover.
The Momentum indicator has just turned up despite the move lower on Thursday so this move down looks to be on its last legs.
Summing up, a big rally is still expected. The only question in my mind is does price head straight up from here or do we get a marginal false break before reversing back up. Next week should reveal the answer.