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Gold Weekly Technical Outlook

Oil N' Gold Team from Oil N' Gold at 11/21/09


Comex Gold (GC)

Gold's uptrend continued last week and made another record high of 1153.4 then turned sideway. Initial bias remains neutral this week and some more consolidations cannot be ruled out. But still, short term outlook will remain bullish as long as 1125.8 support holds and further rise is in favor. Above 1153.4 will target 161.8% projection of 985.5 to 1072 from 1026.9 at 1166.9 next. Nevertheless, considering bearish divergence conditions in 4 hours MACD and RSI. Break of 1153.4 will indicate that a short term top is at least formed and should bring deeper decline. But even in such case, downside should be contained above 1072 resistance turned support and bring another rise.

In the bigger picture, as noted before, rise from 681 would likely develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave. 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 is already met and next target will be 100% projection at 1258. On the downside, however, break of 1072 resistance turned support will argue that rise from 931.3 has completed and some medium term lengthier consolidations should be seen before the long term up trend resumes.

In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.

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