With the price of gold pushing back toward the $1,500 level as it continues to consolidate large gains in 2019, here is the key to the gold market.
The Key To The Gold Market
October 23 (King World News) – Top Citi analyst Tom Fitzpatrick: “At present Gold has posted a 76.4% pullback within a triangle consolidation that looks close to ending. Our bias would be for a break higher with first good resistance at the top of the triangle at $1,506 (see chart below).
More importantly the pivot for the 76.4% pullback stands at $1,520 and a break through there should signal the next move higher has begun. This would open up the way for a test of the trend high at $1,557. Daily momentum is also now turning higher from similar levels to early October…
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Bullish Corrective Pattern Repeating
The correction lower since the trend peak is around 6% (similar to what we saw at the start of the year.) Moving averages are crossed and both turning higher (55 and 200 week) and good support now exists around $1,453-1,459. A move below there, if seen would open up the danger of a deeper correction.
Indecision (Doji’s) on the last 2 weeks of candlesticks suggest the downward momentum is stalling. An equal move to the move up from the 2018 low looks a likely scenario from here suggesting that we can see in the region of $1,646 in the next 3-6 months (see chart below).
Interim resistance around $1,522-1,527 has held so far ion a monthly close basis . Above there would open up for our $1,700+ target (see chart below).
Monthly momentum is flattening out during this consolidation but not from excessively high levels, which saw a $150 rally in Gold over 6 months.
A Weaker US Dollar Will Help Gold
A monthly close below 97.86, if seen, will complete a bearish outside month on the DXY off the high of a 22 month rally (see chart below).
King World News: Fitzpatrick also provided a chart of positioning on the Gold COT, noting that the market is “less long” than it was, but still long (see chart below).
New All-Time Highs Coming
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