Gold prices always keep investors on a bumpy ride, though the ride has at some points been straight up.
Let’s take a quick look at the interesting arc pattern – curved trendlines basically – that gold prices are forming and where we stand within that pattern.
First, the “Pure Arc” price chart:
Trendlines don’t always have to be linear – they can be curved, angular, or arcs like we’re seeing currently in gold.
The pattern officially completed a “Mirror Image Foldback” structure where the right side of the chart looks eerily similar to the left side.
The upper trendline curves up to the recent resistance at the $1,250 level while the lower trendline arc – which is much more pertinent for this discussion – rests at the key $1,170 expected support zone.
Let’s see what else is important about $1,170.
Next, let’s throw a few standard indicators on the chart:
We still see the arc, but more importantly, we see the 50 day EMA rest at $1,166 which is where price found a bottom (low) today and formed a hammer-style candle.
The short term play is to expect a bounce off this level – the convergence of the EMA and Arc, but in the event that sellers keep taking profits in gold, we can expect further selling under $1,165 which would break out of the arc and under the support of the 50 day EMA.
I’ll talk more about this – along with oil, bonds, stocks, and the US Dollar – as usual in this weekend’s Inter-Market Report for members.
See sample reports and more information at the information page to see if you would benefit from the analysis in the reports.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
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