Monday, June 6, 2016
Gold Weekly Chart and COT (Commitments of Traders) GC Chart
Gold is a mixed picture. It is moving opposite of the moves in the US dollar as usual. The dollar is getting tugged around by Federal Reserve statements concerning rate hikes. The green circles are key gold bottoms and red circles key tops. The path ahead is a toss-up.
The bottom call to begin the year was easy with the universal positive divergence ready to launch price skyward, which it did (green lines). Likewise, the drop that began late April-early May was forecasted by the negative divergence (red lines and rising wedge). The fly in the ointment (for anyone short gold) is that the door remains open for gold to come back up because the MACD line was not convincingly negatively diverged as price made its high. The drop over the last month, however, was strong and drastic from 1300+ to under 1220. The indicators such as stochastics are weak and bleak wanting to see a lower lows in price after any bounce. Gold is currently trading at 1248 as the new week of trading begins.
The ADX line is signaling a strong trend higher remaining for gold (pink box). The monthly chart is meandering sideways. The 20-wk MA crossed up through the 50-wk MA a bullish indication. The MACD cross is bearish. It is a mixed picture. Price held that lower channel line at 1215-ish so that is a key number to watch ahead. The stochastics are under 50 which is bearish; watch to see if the RSI slips sub 50% which would be bearish.
The COT chart indicates the gold tops and bottoms. That top one month ago was an easier call than now with the red bars at lower extended levels and the light blue bars extended higher. They have pulled in again so the picture is now more mixed. Keystone is not trading gold lately. The thinking is that gold may move sideways here forward with a slight downward bias. The FOMC rate decision is Wednesday, 6/15/16, and the Brexit vote on 6/23/16, so the US dollar index is likely in for a roller coaster ride which in turn will whip gold to and fro. 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: The COT chart is courtesy of COT Price Charts a handy site and annotated by Keystone.