Gold takes a breather, while negative data continues to pour in.
Gold’s inability to close above $1,300 is a mild hit for bulls, but prices will likely consolidate prior to the next leg higher. Prices declined to $1,280 per toz., just above the descending , now support. The likely scenario is that gold will reenter the and grind higher.
Prices will look to regain $1,295, while a close below $1,273 will cause prices to push lower to $1,259 per toz.
The longer-term, monthly chart does look promising, however.
The price action in January has caused an overwhelming monthly candle that trumps the previous two. Currently, price action is hung up around September’s close of $1,285 per toz, while price action resistance is found at $1,303. Gold has been able to recover from testing a longer-term ascending support , but prices are still stuck within a created when the bull market correction first took place in 2013.
If prices can close above $1,303 then near-term resistance would be seen at $1,353; but, the next monthly target is found at $1,391.
There is accumulation of gold futures , which picked up since gold first bottomed at $1,130. Gold was overbought in regards to the near-term chart, and the easing off of $1,300 will correct that. The is well from overbought, and it is ticking upward – a positive sign of more gains to come.
The +/- DMI is also looking promising. The negative price indicator (- DMI) has remained on top since the correction was first initiated, but it has recently given up ground. The + DMI is pushing higher, and a convergence on the monthly chart could prove positive for that push beyond $1,353.
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Nothing fundamental points to lower gold, really. You can either say "no inflation" or "deflation." The problem is, the majority look at it too simplistically. It's like saying low gas prices equal more consumer spending as we continue to see that's not the case (which I been saying for months now). Gold is a money equivalent and crusher of anything fiat. It is one of the prime financial assets.