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Gold market update, 11.01.2005

After the past months sell of in gold (and rally in dollar) we could finally be in for a shift of the short term trend. (Chart courtesy of StockCharts.com)

All the power up trend lines (UT2, UT3 and UT4) have been broken in the past month and the break has resulted in a sharp decline of price in each case. The UT1 of this chart comes quite close to the major up trend line shown in the 30 year chart below, and can be seen as the next level of resistance with the 200 day moving average. 

From a TA standpoint the RSI supports the notion of a price bottom. A MACD cross-over would further strengthen the TA picture. From a trading stand point, based on up trend lines and the 200 day moving average, the level for stops in the current situation should be placed in the $418-414 area.

The dollar could still rally a few percent and gold is all in the dollar, so the move down in gold is not necessarily over yet. Since I see no long term policies to shift the down trend in the dollar, the up trend in gold will hold for several years in my opinion. 

Earlier articles about silver:

Sources:

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