Gold Traders Protect Your Longs
Gold traders should have exited today as prices are showing strong signs of lower prices in the near future. Gold slid over 4% this week so far, while gold stocks have dropped an average of 9%.
The weekly chart shows a very clear picture of resistance for gold which was reached last week and we are starting to see sellers step in now. Also my custom stochastic indicates gold has reached a short term top. Prices could retrace (pullback) to $700 level but I am hopeful that prices will hold around the $800 level. We will continue to watch it unfold.
Weekly Gold Trading Chart
Gold Stocks Lead the Price of Gold
In many cases gold stocks tend to lead gold. This daily chart below clearly
shows a classic 5 wave counter trend rally and trend line breakdown. Gold
stocks hit resistance last week and have been sliding lower since hitting
their heads on the 200 moving average. Stochastic and MACD both signaled
this is a high probability move, indicating there could be much more downside
pressure.
Daily Gold Stock Chart
Gold Trading Fund and Analysis
The price of gold continues to have sellers stepping in this week. We continue
to hold our core position as gold consolidates (pulls back) while short term
traders take profits. We are looking for prices to drift lower and hold above
the support trend line providing a reversal candle and pivot low with risk
less than 3% for our next entry point. If gold stocks take another big hit
this week then the HUI:GLD ratio will turn bearish and that's not good for
the price of gold. All we can do now is to wait it out.
Daily GLD Exchange Traded Fund
Conclusion:
The broad market as well as commodities have been holding their ground and
making small gains for the past month. Fewer buyers seem to be at these higher
prices, leaving me with a cautious vibe. Stick with your stops; you can always
buy back in.
I will provide a full Special Report covering Gold, Silver and Oil this weekend. For more information please visit my website: Chris Vermeulen www.TheGoldAndOilGuy.com.
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Author: Chris Vermeulen
Chris Vermeulen
TheGoldAndOilGuy.com
Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com. There he shares his highly successful, low-risk trading method. For 6 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return. Reach Chris at: Chris@theGoildAndOilGuy.com
This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Copyright 2008-2013 © Chris Vermeulen
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