Tuesday, December 22, 2015

GOLD Commitments of Traders (COT) and Gold Daily Chart

Gold is staggering sideways like a drunk in Times Square on Saturday night. The red circles show important tops in gold price and the green circles show the important bottoms. Followers will remember the July and September lows Keystone described as they formed. The COT chart bars pulled in towards the center hinting at a bottom and the positive divergence (green lines) for the indicators on the weekly chart made a bounce call easier. In addition, the herd was very negative on gold everyone expecting a crash in August-September; right when it bounced as the charts indicated.

Gold is very much in a sideways pattern going forward the brown sideways channel lines are in play. Note how the moving averages maintain a downward bias but are perhaps starting to line out sideways encouraging a sideways move in price. The indicators are slowly squeezing in towards the center lines signaling sideways behavior. The ADX drops to 19 so there is clearly no firm trend in place which means price is moving sideways.

The COT chart is consistent with a near-term bottom so an edge has to be given to the bulls but overall sideways should be the order of the day going forward. The projection is sideways to sideways higher for gold emphasis on the sideways.

The US dollar index should move sideways to sideways lower going forward, and euro sideways to sideways higher (despite ECB QE), this corresponds to oil and commodities recovering going forward and would help create some buoyancy in gold. 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 courtesy of Cot Price Charts a very useful site for commodity research. The chart is annotated by Keystone.

Note Added on Thursday, 12/24/15 at 11:46 AM EST:  Gold is at 1076 the flat sideways behavior continuing. Price bounced off the 20-week MA at 1067 so treat this level with respect.

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