Gold short term technical update

From mid March to early may the price of the Comex June gold contract (GCM8) pulled back about 190$ (1038$ > 846$) currently trading around 885$ . Along gold recent weakness there is some USD strength vs some of the other popular currencies such as the Euro , Yen , British pound, Swiss frank and others.

The trend is still down ( as defined by the diagonal line connecting the major top (1038$ at mid March) with the secondary top (~956$ at mid April), But there is a minor uptrend inside that bigger down trend channel which give some chance for the 846$ bottom to hold.

Support levels : diagonal minor trend line , ~876$, ~856$, ~846$, ~817$, ~792$

Resistance levels : diagonal downtrend line, ~897$, ~913$, ~930.5$, ~957.5$, ~977$, ~1039$.

June Comex gold futures (GCM8) 8 hours chart

Gold futures (GCM8) and silver (xagusd) technical update

Gold is down trending and aiming to break support at first April low (876.5$ for GCM8). The price of gold failed to penetrate the 50% Fibonacci resistance at 957.54 and selling pressure pushed the price lower.

Resistance at diagonal upper trend line, ~906.5$ , ~938$ (38.2%Fibonacci) , ~976$ (61.8% Fibonacci) , ~1003$(76.4% Fibonacci) and the high of 1038$.


Support at 876.5$ ,~860, 850$ -840$ , ~820$, 792$, ~750$.


June Comex gold futures (GCM8) 8 hours chart



Gold spot weekly chart






Silver is down trending as well and already lost 5$ from its top at 21.33$ (spot price)


Silver Spot weekly chart

Short term technical update (GCM8)

The bulls had a few moments of grace as the price of gold managed to trade above the diagonal trend line resistance, but gold failed to penetrate the secondary top at ~960$ and pulled back ~50$.

resistance around ~938$ (38.2% fibo) , ~976$ (61.8% fibo) , ~1003$(76.4% fib) and the high of 1038$.

support at ~888$, 876.5$ 850$ -840$ , ~820$, 792$.

All price relating to Comex gold June contract (GCM8)

Gold price short term analysis

Dear readers ,


General observation: In the last several weeks some actions took place, all of them in order to stabilize systematical large size financial risks. Major central banks such as the US Federal Reserve(Fed) and the ECB are keeping a closer eye on the markets, apparently being more flexible and “creative”.

The above has probably a negative continues influence on the affinity to physical gold as an insurance – proof to major systematical financial risks.


Technical condition
Spot chart - gold dropped below the uptrend line which connect the August and December bottoms (2007) but managed to climb back, currently it closed right on that line.




Gold June future contract (GCM8) 8 hours chart - Topped at 1038$ , bottomed at 876$. resistance - so far the 38.2% fib (938$) - , 950$ -960$ (50%) . The downtrend linear channel is still encapsulating the minor uptrend so the bear force has the control on that time frame.

Gold chart & update

The climate: Continued stress of banks and other financial institutions. In my opinion the source of this stress is illiquidity of non trade able (unlisted at a public exchange) financial “products”.

Outlook: High volatility is present in all markets, extreme events in which investment banks remove huge amounts of liquidity while central banks creates huge amount of liquidity to fill the “holes”.

Technical:

Recent pullback was the biggest since August 2007 bottom, the spot price of gold came down ~128$ (905$) since it's top at 1033$. The spot price of silver dropped from it's top at ~21.35 to ~16.67$.

The trend line which connect the August and November bottoms is still intact. See the chart below for Fibonacci proportions and less steep trend lines. If the recent bottom zone at 905$ - 884$ will not hold then the price might retrace to about 790$ if not lower.

Later on and depending on the fundamental events which will be reflected on the charts – gold might move higher or maybe much higher then recent highs.