Gold Fights For Support above 2011 ATH, in Ongoing Bull Market!
Hi Everyone! Welcome to this weekly analysis of gold! For those who have followed me over the past few years, you know that I've been consistently bullish on gold. I repeatedly called for a new all time high, while gold was trading in the 1200 to 1300 range, and as you can see, gold was recently able to produce a new all time high! The question now, is how much higher can gold go?
So, there are a few key things I would like to point out on the gold chart. First and foremost, we can see that gold is currently trying to hold support on the previous all time high from 2011. In late July, gold was able to break above the previous all time high, setting a new record, but it has turned back to the downside to test that region (red horizontal trendline) for support. This is actually bullish action, especially if we see a hold on the previous all time high.
As of today, we are seeing gold break down below that previous all time high. However, there hasn't been a close of a daily or a weekly candle below the 1923 support level, since GC broke out above it. Regardless, if gold breaks down below the 1923 support level, I will be looking for huge support on the 50 week moving average, around 1700. You can see that in March, gold broke down to the 50 week MA and held it as powerful support. I think there is a high probability that the same thing will happen again, if gold falls substantially from the current levels.
Interestingly, there is a bearish divergence on the RSI. However, there is NO divergence on the MACD, which is reflecting a healthy rise of building upside momentum. With that said, the MACD is crossing over at the moment, which could be a precursor to a short term downswing in an otherwise healthy longer-term upside expansion. So, there is a bit of a discrepancy between the MACD and the RSI, but the overall long-term picture remains bullish.
Speaking of the long-term picture, I have a rising teal colored trendline on the chart. That trendline begins at the former the all time high of 1980 and connects to the former all time high of 2011. Obviously, that is a very important upside resistance level, and I think it's only a matter of time before gold rises to test that it. Such a test could take place around 2225. As I said, that trendline is the most important upside resistance on the chart, and IF gold can surpass it, I think we could easily see the yellow metal rise towards 2800. If you're wondering where I got 2800, it's simply a projection of the depth of the bowl that gold has created over the past nine years.
In terms of fundamentals, the Fed has basically proven that it literally can't reverse course from the current easy money policies. They will continue to expand the money supply, and they will continue their efforts to generate inflation, even if that means letting it run beyond their 2% target. So, owning gold is a good bet, when such economic policies are on the table.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
So, there are a few key things I would like to point out on the gold chart. First and foremost, we can see that gold is currently trying to hold support on the previous all time high from 2011. In late July, gold was able to break above the previous all time high, setting a new record, but it has turned back to the downside to test that region (red horizontal trendline) for support. This is actually bullish action, especially if we see a hold on the previous all time high.
As of today, we are seeing gold break down below that previous all time high. However, there hasn't been a close of a daily or a weekly candle below the 1923 support level, since GC broke out above it. Regardless, if gold breaks down below the 1923 support level, I will be looking for huge support on the 50 week moving average, around 1700. You can see that in March, gold broke down to the 50 week MA and held it as powerful support. I think there is a high probability that the same thing will happen again, if gold falls substantially from the current levels.
Interestingly, there is a bearish divergence on the RSI. However, there is NO divergence on the MACD, which is reflecting a healthy rise of building upside momentum. With that said, the MACD is crossing over at the moment, which could be a precursor to a short term downswing in an otherwise healthy longer-term upside expansion. So, there is a bit of a discrepancy between the MACD and the RSI, but the overall long-term picture remains bullish.
Speaking of the long-term picture, I have a rising teal colored trendline on the chart. That trendline begins at the former the all time high of 1980 and connects to the former all time high of 2011. Obviously, that is a very important upside resistance level, and I think it's only a matter of time before gold rises to test that it. Such a test could take place around 2225. As I said, that trendline is the most important upside resistance on the chart, and IF gold can surpass it, I think we could easily see the yellow metal rise towards 2800. If you're wondering where I got 2800, it's simply a projection of the depth of the bowl that gold has created over the past nine years.
In terms of fundamentals, the Fed has basically proven that it literally can't reverse course from the current easy money policies. They will continue to expand the money supply, and they will continue their efforts to generate inflation, even if that means letting it run beyond their 2% target. So, owning gold is a good bet, when such economic policies are on the table.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-