LunaticTrader

Investing with the Moon

Posts Tagged ‘Precious metal’

Gold on the brink – part 2

Posted by Danny on February 20, 2013

A few weeks ago we warned for a possible sudden move downwards in gold prices
Meanwhile gold has dropped more than $50/ounce and is now sitting just above $1600.
What’s next?

Here is the daily chart (click for larger image):

gold daily

The recent price action is contained within a beautiful arc formation. Last week’s drop tested the bottom of the arc (~ $1590), but is holding up so far.
If this bottom holds and prices climb back above $1670 then I would buy.
I would rate this scenario a 30% probability at the moment. This will rise to 60% probability if gold is still above $1600 by mid March.

If gold goes lower, then last year’s bottom around $1530 becomes the next major support.
The longer term weekly chart shows us what to expect if gold falls below $1530 (click for larger image):

gold weekly

Line B would be the next support trendline, currently around $1400.
Next is line A, which offers support around $1100 this year.

Good luck,
Danny

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