Let’s take a moment to update the current Gold Structure and levels to watch as price compresses between a critical support level and an upper resistance pivot.
Gold’s daily chart shows a form of “EMA Compression,” where price is currently sandwiched between a rising 200d SMA (very important reference level for longer term traders) and falling overhead 20 and 50 day EMAs.
The main idea is that price must break one of these boundaries – and the break should carry on towards the next logical price target as indicated.
Thus, a clean break above $1,725 suggests a continued rally back to $1,775 or $1,800… while a similar breakdown under $1,675’s critical support suggests a further downward revisit of $1,575 or lower.
Keep in mind that structurally, gold is in a short-term SIDEWAYS trend between $1,575 and $1,800 from September 2011 to present.
Let’s add a Fibonacci Grid and see the larger Daily Chart levels in Gold beyond the basics:
We see a larger perspective of a Sideways or Rectangle Consolidation in Gold prices in the context of a larger (weekly and monthly chart) primary uptrend.
When we add a classic Fibonacci Retracement grid, we see how the 38.2% Fibonacci Retracement intersects with the 200d SMA just as the upper 61.8% retracement overlaps the 20d EMA at the $1,725 area.
In simplest terms, short-term traders should watch these key price levels this week for any signs of a breakout (or breakdown) which could lead to a continuation move on to logical price targets as shown.
Related ETFs: SPDR Gold Trust (NYSEArca:GLD), iShares Gold Trust (NYSEArca:IAU), ETFS Physical Swiss Gold Shares (NYSEArca:SGOL), Sprott Physical Gold Trust (NYSEArca:PHYS), ETFs Asian Gold Trust (NYSEArca:AGOL).
My name is Corey Rosenbloom, CMT (Chartered Market Technician) trader, educator, analyst, and I am excited to share with you my experiences studying and trading the markets and to hear from you regarding your experiences, challenges, and frustrations, and successes. My goal is to create a community dedicated to reaching out to those who have been burned by the market or are anxious about risking their money to make money in the stock, options, or futures markets. Together, we can share strategies and learn how to overcome crippling fears that keep us from achieving our highest potential.