I have presented an argument for a break of the long term channel. I think this is a high probability event.
One scenario as shown in this chart , is where gold takes another leg down, before the channel break.
The main reasons are
1. Wave perspective - there is a preceding 5 wave corrective pattern. If this is so , then the ABC pattern must be a Zig Zag. The current wave B cannot then pass the origin of wave A.
2. Bearish Divergence - price has made a higher high and the oscillator has made a lower high, signalling a possible reversal.
3. Correlation Divergence - look at the HUI index , and in the past 3 weeks is moving opposite to gold ( it is usually a correlated pair)
4. Resistance Factors - Supply resistance at 1295 , coinciding with a monthly R1 pivot. Not to mention the long term trendline resistance.
It is likely the market would like to close the gap in price from April , but beyond that keep an eye out for a potential reversal.
One scenario as shown in this chart , is where gold takes another leg down, before the channel break.
The main reasons are
1. Wave perspective - there is a preceding 5 wave corrective pattern. If this is so , then the ABC pattern must be a Zig Zag. The current wave B cannot then pass the origin of wave A.
2. Bearish Divergence - price has made a higher high and the oscillator has made a lower high, signalling a possible reversal.
3. Correlation Divergence - look at the HUI index , and in the past 3 weeks is moving opposite to gold ( it is usually a correlated pair)
4. Resistance Factors - Supply resistance at 1295 , coinciding with a monthly R1 pivot. Not to mention the long term trendline resistance.
It is likely the market would like to close the gap in price from April , but beyond that keep an eye out for a potential reversal.