Gold - 4 Hour Chart
While Gold has had a nice recovery off the recent lows and managed to climb back above the psychological resistance level of $1600, it is nowhere near out of the woods as of yet until it can AT THE MINIMUM push back above the resistance level noted in blue on the chart. That comes in near $1625. Technicians will be watching to see if it could then muster enough buying to take it above $1650. There are a fair number of buy stops located above there which market bulls would love to set off. Whether or not gold could reach them is as of yet unclear.
For now the technicals are bearish so many will be looking at rallies as selling opportunities whether for unloading stale and/or underwater long positions or to initiate new short positions.
Bulls are attempting to hold the line here but they have more work to do.
Hi Dan,
ReplyDeleteI know you guys are rather traders and technically oriented, but here is a link to a quite thorough and interesting description of the reasons why gold prices are going down.
Mainly linked to central banks leasing gold on the short term because of a need of cash.
"We’ll help get you started by pointing out a few likely truths:
(1) Commercial banks are probably running short on liquidity and as a result LIBOR rates have been rising.
(2) Commercial banks are probably leasing gold from central banks (or more correctly, bullion banks are leasing gold from central banks on behalf of commercial banks). See why we spent time at the beginning on the definition of “bank”.?
(3) Commercial banks that have leased gold are probably not willing to bear any gold price risk and therefore they are buying gold forward, causing the gold forward rate to rise even faster than LIBOR. The result is a larger negative gold lease rate. Under these market circumstances, the negative lease rate says nothing about the supply of gold available for leasing since rising LIBOR is a dollar supply phenomenon while the rising gold forward rate is a forward gold demand phenomenon. Overall this is bullish for gold even if short-term bearish for gold prices."
the link :
http://www.metalaugmentor.com/analysis/charlatan-exposed-negative-gold-lease-rates.html
Take care,
thank you Dan for your most insightful charting! I find it helpful to see you chart out layers of resistance and support.
ReplyDeleteCheers from New Zealand,
Jordan
Has any one took notice to the fact that the price of natural gas has been approaching zero?
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