by Bill Downey     Price Analysis of Gold and Silver
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Technical Analysis Trading Gold, Trading Silver/ analysis By Bill Downey providing key turning points & charts for investors and speculators in Precious Metals Trading, and Precious Metals Markets

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A seasonal and short term view on gold

10 May 2016 4:29 PM | Bill Downey (Administrator)

Launch GoldTrends.net 

Mid Week ~ May 10 2016

Seasonally May is the strongest month for the USD.  Not every year, but enough for it to be the strongest overall month.  In addition, for gold, May is the 2nd weakest month of the year. 

The chart below shows the US Dollar hitting 2015 price support and (so far) not closing below it.  It's the perfect time for a rebound rally in price and time and thus it should be respected. 

IF THE US dollar came withing 1 point of violating the 2015 low and gold came within 3 dollars of taking out the 2015 high, then it stands to reason that a new low in US dollar and new high in gold would be a YEARLY event and thus would be another notch in confirming longer term reversals.  Gold KEY RESISTANCE IS 1314-1322.  A weekly close above 1322 would favor gold moving towards 1400.  On the other hand, a weekly close below 1217-1222 would delay this event (for now).


This week

Our post on twitter this morning was looking at potential support in the 1252-1257 area and since then a 10 dollar rally has been in place.  Should these lines break the next important place would be the 1240 area.  That is where we have the April 27th low before the final rally to 1300 and it is also the point of support from the 19th to 21st of April.    On a weekly basis the 1222 area is the critical support.  The odds of 1252-1257 or 1240 being the low this week are pretty good.  If gold is heading for 1222-1240 I strongly suspect that will be kept for next week.   

Summary;  Look for 1240 or 1252-1257 as this weeks support (most likely point).  Lets go to resistance on the next chart.



This week


It looks like the mid-week bounce in gold is underway.  I've taken off the channel lines on this chart and to me it looks like gold is going to go test the resistance at 1272-1276 where the very short term moving averages are crossing.  A close above the moving averages, and the next resistance doesn't seem to be until near 1295 (last weeks high).  A close above the averages and we could say a move towards 1285-1295 can take place. 


Summary very short term;

Gold is still choppy and overlapping in overall pattern look.  If this is only a mid week bounce, then it should end Wednesday or Thursday.   Closes above the moving averages allow for further upside into Thursday.  


Gold Short term cycles

The next blue cycle is due May 21st (plus or minus 72 hours).  That means that a look at the chart suggests that the pullback is ON ODDS not complete.   That doesn't mean it can't explode higher at any time, it means all things given we should expect a low sometime next week.  The best spot for that is at the lower 2015 channel line or the red 2016 upper channel line.  That puts support in the 1210-1230 area and 1240-1255 (for now).  If the cycle plays out, a ideal low would be where the red and black trend lines meet on the cycle chart below sometime in the 2nd part of next week.  



Summary

A short term low is due next week.  

Closes above 1272-1276 favor another attempt at pushing prices towards 1290-1300.

Anytime we are below 1255, be on guard for potential testing of 1222-1240.

If the short term cycle plays out, we should see a low point next week and a move higher into the 1st Week of June is the odds favored scenario at the moment.  

2015 high was 1308 --- as long as we are below that, pullback can remain in play.  A close above 1322 on a weekly basis would be bullish signal for 1400 gold as next target.

WATCH THE US DOLLAR -- odds favor gold reacts in opposite.  



Technical Analysis :: Gold & Silver

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