Sunday, July 15, 2018

Gold COT (Commitments of Trader) and Gold Weekly Charts; 200-Week MA Support Challenged

The red circles show tops in gold while the green circles sow the bottoms. The COT chart looks like the cross-section of a turbine motor; will the yellow metal accelerate higher or sputter and throw a blade?

The COT chart hints that the bars may expand outwards which would be in concert with gold rising. Price has violated the lower band on the weekly candlestick charts so a move higher to the middle band at 1306 is on the table. Note how price came down to test the 200-week MA at 1235-1236 and bounced. The 200 is now an extremely important support level for gold. The metal will be fine and should rally higher as long as the 200 is held. if the 200 is lost, gold may tumble into a boatload of trouble likely in concert with deflation and a recession.

The indicators are mixed. The stochastics are oversold and positively diverged wanting to see a bounce in this weekly time frame. The money flow is possie d over the 6-mth period. The RSI, MACD and histogram,however, are weak and bleak wanting to see a lower low in price after any bounce occurs. Thus, there is likely a month of sideways chop ahead for gold. Probably one week up, then then next back down again, then up for a week, then down for a week again, that may be enough time, say one month out where the RSI and MACD will be set up for possid d and a substantive bounce should occur.

If nimble, gold will likely pop in the coming days to honor the stochastics and money flow but then quickly roll over again, chop sideways for three to six weeks, and then perhaps set up nicely for a strong rally ahead.

The daily chart is setting up with possie d so gold is like a buy for the days ahead. Price will likely pop to 1260 and then perhaps roll back over to the downside to the current lows again say a week or two out.

The gold monthly chart trends sideways through the 1200-ish to 1375-ish range the last 2-1/2 years. Gold is down for the fourth month in a row currently. Gold simply appears to want to chop sideways into year-end. Keystone has no positions in gold currently but will maybe play long starting perhaps in 2 or 3 weeks. Gold will likely tag that middle band at 1306 at some point over the next month or so. 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 provided by COT Price Charts and annotated by Keystone.

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