GOLD Weekly Chart; Oversold; Positive Divergence Developing

Gold. Shiny gold. Back in 1979, John Stewart rhythmically sings about turning music into gold. Keystone called the top in the shiny metal during the summer and down she goes. Note the MACD line, however, always remaining long and strong through those price highs. The neggie d with the other indicators demanded a pullback but the MACD says there are fumes remaining in the gas tank to help price recover at some point in the weeks ahead. Well, several weeks have passed and gold keeps printing lower lows.

But gold bugs, bulls, finally have a glimmer of hope. The stochastics are oversold agreeable to a recovery bounce. Ditto the possie d with the stoch's. The histogram is also positively diverged wanting gold price to recover. Ditto the ROC that feels gold has been beaten enough. The RSI is interesting since it is now possie d over the last 2 weeks although it just dropped into bear territory below 50%; mixed signals.

On the gold bear side, the MACD line is sloping lower forecasting at least a couple-few more weeks of sogginess for gold prices before they can stabilize and bottom.  Ditto the money flow that remains weak and bleak.

Gold price receives a bounce due to the possie d and oversold stochastics and may want to come up to back kiss that important 1850-ish support/resistance level, however, gold would be expected to roll over again for a matching or lower low in price as the indicators all try to set up with possie d.

Everybody and his bro expects the dollar to weaken but the previous chart shows how it will likely rally and then when the short-covering kicks in the upside may get out of control. Gold will suffer as the dollar pops. This behavior would be in sync with gold finishing up this little mini one week or less rally and then rolling back over as the dollar catches a bid. Perhaps the Forex traders will sniff out euro weakness after the ECB meeting next Thursday, 12/10.20. That would push the US dollar higher and perhaps start the dixie shorts to panic.  The big jump higher in the dollar in March resulted in the stock market crash as well as gold falling in retreat.

March redux is likely the path ahead although gold will likely not fall as much as in March since it has already been slapped around. When trouble hit in the spring gold was in a big rally higher. Thus, gold is enjoying some buoyancy as explained above but price should roll back over lower on this weekly basis. Let's talk jog moves. The MACD and money flow may go possie d at the same time which would require a down week so conceivably gold may bottom in a week or two. If money flow turns possie d first, then the MACD, that will require a down week, then back up for a week, then down for a week again for the MACD to go possie d and identify the bottom in gold on the weekly basis. So you can watch the chart to time it out. Gold will bottom say in 1 to 4 weeks and this window can be brought in tighter and tighter each day forward. A lot depends on the dollar that is sitting on a launch pad right now loaded up with possie d fuel. Gold will probably move through 1700-1980 for the next year or three. 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.