justatrader
Long

Gold in 2014 - Make or break!

FX:XAUUSD   Gold Spot / U.S. Dollar
581 3 5
The media actually plays an important role when it comes to market sentiment. Gold             bears, they shouted and everyoned shouted, Gold             bears back. But look at the monthly charts and it paints a different picture.

RSI Divergence - Price makes higher lows, RSI makes lower lows. Hidden bullish divergence , occurs during a correction to an uptrend.

RSI - While 80 - 40 oscillation indicates a bull market, recent RSI has dipped below 40. But that is normal, as long as 60 doesn't act as resistance and if RSI doesn't drop below 33.97 (which is the lowest low of this bull market) aka bottom (possibly).

During the months, notice the 60 level never acted as resistance, which gives hope that Gold             is still bullish from the bigger picture (but poses the risk of 60 coming in as resistance which could validate a bearish trend ).

On another note, most Central Banks of sovereign nations do have substantial holdings of bullion.. It would hurt them quite a bit should the value plummet. Also, India which has imposed restrictions on Gold             imports during the height of the Greenback's strength could possibly ease these restrictions as recent price action and comments from the finance minister (post the mild taper) shows some confidence in the USDINR             . So should and when India ease these restrictions (which it will sooner than later), it would be like floodgates opening. A key festival, Akshaya tritiya incidentally falls on May 2014.. Its one of those times when Gold             is bought like crazy in the country with banks offering high discounts.

Finally, the FOMC's taper decision is still not set in stone. So markets will react to each and every upcoming FOMC statement in regards to the taper. Also the Fed doesn't quite rule out the possibility of expanding QE should the need arise.

2014 is quite likely to be the year of Gold             .. Make or break!
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I forgot to mention that the region of $1158 would be more ideal.. Its the target for a previously established inverted H&S pattern on the daily chart.

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This looks perfect! Thank you for sharing!
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