GOLD Weekly Chart Negative Divergence

Gold weeky chart has shown negative divergence the last couple weeks but this parabolic move has moved the RSI and MACD to levels matching and perhaps sneaking above the prior highs (teal lines). The stochastics and money flow, however, remain firmly negatively diverged. The price now is at the top rail of the channel and a look back at 2009 provides a fractal comparison. The negative divergence set ups shown in blue and purple created spank downs. Note the bull flag pattern in red during the first half of 2011. Since the RSI and MACD levels are up to the prior highs, this hints that after a pull back occurs price will want to come back up to match or even exceed these current levels.

The wild card is if margin requirements are raised for gold since the affects will be drastic, just like the silver margin changes in late April. The chart is consistent with placing a major top currently although the continued strength in RSI and MACD hint that an M Top may be the final pattern to top things and this will take a month or two to play out. The other projected outcome is this level is the top now and gold will pull back for a multi month breather before making the next secular move up. The gold:silver ratio is moving up so gold is actually favored over silver currently. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.