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Reuters GOLD Technical Analysis - By Phil
Smith |
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Daily Charts |
Weekly Charts |
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Near
term (daily chart). The intermediate trend for gold is still down
but Monday saw a little support given the market was overstretched to the
downside as you can see by the RSI. Watch the stocks as gold has a high correlation
with the stocks at the moment and the high negative correlation with the
dollar. Otherwise the signals were getting a bit mixed apart
from the MACD. This also looks like a good topping pattern we
are forming at the moment with the reaction high lower than the initial high
as it should be. We have seen a decline in volume as the pattern has formed
so it fits the rules. The 50 pct retracement pretty much
marks the neckline as in chart four and now the neckline has gone. The
target from this pattern is around $1,000.
On the third chart you can see interesting spikes
in volume over the end of the year too and we need to watch this closely.
Good rallies do not come in low volume. We need to see good volume as well as
this MACD cross for a better signal for an intermediate term move higher. The
two periods of zero, or near zero, volume are
Christmas and the New Year holiday when most global trading centres are closed. Likewise you can see Easter. Also on the third chart you can see the old triangle
target, the red line, is providing some overhead resistance to a move higher. As above. Gold/dlr
correlation still high negative so watch the dollar. See the dollar chart for
the outlook there. Also the gold/stocks correlation is also high again and
the correlations that were in place during the post March stocks rally are
now coming back to high levels. See the glossary link above for an
explanation of the studies used above.
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Reuters Market Technicals By |
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