Thursday, October 15, 2015
GOLD COT (Commitments of Traders) and Daily Charts
The green circles show the tops in gold prices and the red circles show the bottoms. Remember that Keystone was posting the gold COT a few times a couple months ago as that bottom formed in July-August. The low bars on the COT hinted that a bottom was in play and gold was set to move higher. Marrying the COT in late summer with the positive divergence, oversold conditions and falling wedge shown on the candlestick chart forecasted a rally which occurred.
The blue upward-sloping channel is in play. Gold has spiked higher in recent days as the dollar drops and euro pops. The Federal Reserve likely will not raise rates until 2016 so party time continues with easy money policies and the dollar weakens. US dollar index drops from 97 to a 93 handle over the last three weeks. The move pumps gold higher.
The COT bars continue to expand showing that a rally is in play. COT chart information lags. The COT bars are within where the prior tops over the last few months have occurred so there is likely a near term top soon at hand.
The candlestick chart shows negative divergence (red lines) for the indicators but the MACD line is long and strong wanting another price high after a pull back occurs. Price will need to back kiss the 200-day MA at 1176. Price has violated the upper standard deviation band so a move back to the middle band, the 20-day MA, at 1141 and rising, is in play. The RSI and MACD have short term momo which will also help maintain buoyancy in gold price for a few more days or week or two.
If you missed the rally in gold the charts urge caution against trying to chase the upside now. Gold should receive a pull back in the near term and take a sideways rest but the weekly chart remains encouraging for upside. Perhaps gold will stutter sideways at 1160-1190 digesting this month's sharp rally and the rally in general off the late summer bottom. 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.
Note: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.