GOLD Weekly Chart Negative Divergence

Gold weekly chart confirms the bearish negative divergence on the daily chart. The blue lines show the late 2010 overbot, rising wedge and negative divergence spankdown for gold. The game changer was the Middle East which promptly turned gold bullish in late January. The bull flag shot price to 1500+.

The red lines now show a rising wedge and negative divergence across all indicators. The green circle for the RSI shows how it was the only indicator that wanted to see another higher high with price, and this week that was attained, so that loose end is closed as well. The ADX shows the strong trend in late 2010 but now the ADX is lower than 2010, and exhibiting negative divergence for this price high.

Gold price always comes back to the 65 week MA, now at 1354, so that will require close watching, it has been 2 1/2 years since it last touched. The strength of the move is apparent with price above the 20 above the 50 above the 200 and using the 20 MA as support the whole way on this long two year run. The volume is not impressive for this new high. Perhaps the institutions are selling to Joe Six as the gold kiosks in the malls and the gold tv commercials come to a frenzied peak.

When both the daily and weekly charts agree with a divergence, in this case negative divergence, across the board, for all indicators, it is a high probability trade, thus gold is topping here and it appears to be a major top. Projection is a top in gold here at 1585-1620, and down after that for the weeks and months ahead, targetting the 1250 to 1425 zone. This call goes against all fundamental reasoning when factoring in quantitative easing and inflation expectations, but, perhaps, inflation is not the worry, but rather deflation is what approaches. 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.