Thursday, September 4, 2014

GOLD Weekly Chart Sideways Symmetrical Triangle Tight Bands

Gold is dropping recently as the dollar rises due to the euro falling. ECB President Draghi fired the QE money bazooka today, or QE Light, or however it may be characterized in the days ahead, which collapses the euro. The dollar flies higher above 83.75 which will pressure commodities that are denominated in dollars. The ADX pink box shows how the drop in gold was a strong trend lower in 2013 but that petered out as the year began. Gold then settles in to a trendless sideways stumble this year refusing to hint which way it wants to commit. As time moves along, price funnels into the sideways triangles and the standard deviation lines (pink) squeeze in to launch a huge move in the coming weeks. Price appears to be committing to the down side as the indicators show weak and bleak profiles wanting to see lower lows after any bounce (short red lines), but the next 2 to 3 weeks will need to play out before the story is told.

Price sits exactly at the bottom trend line. What theatrics. The Monthly Jobs Report is in the morning and will impact global markets including gold. Price will bounce, or die, from 1260. The smaller triangle is symmetrical with a vertical side of 250 bucks. The larger triangle is not symmetrical and has a 450 handle vertical side. Thus, if price collapses from the triangle tomorrow at 1260, the downside target is 1010. And the more dire downside target is 810 for a 8000-1000 landing zone. If the bulls win out by sending gold price up and out of the triangle at the 1300 level, the upside target is 1550 and the uber upside target is 1750 for an upside target zone at 1550-1750.

Gold will make a firm and epic decision over the next two weeks. There is support at 1250 so if that level fails down is the direction. Conversely, there is resistance at 1340 so if the gold bulls overcome this level up is the firm direction ahead. Note that there remains space in the apex of the triangles and gold price may keep playing a sideways game through 1260-1300 for another 2 or 3 weeks before making the firm decision on direction but considering the tight bands it will likely come sooner rather than later and the move will likely be dramatic perhaps a 100 dollar gold move for starters. Gold bears win under 1260 and especially under 1250. Gold bulls win above 1300 and especially above 1340. The battle continues between 1260 and 1300. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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