Gold – On the weekly time frame gold so far have been on the rise and is very near near term resistance around 1400 zone. Current weekly price action shows us a bearish candle close with 2 preceding pintail candles indicating that we might be seeing lower gold prices next week possibly moving towards nearest support at the 1300 support zone which coincides with the slanting down trend line.
We will be looking for a short term bounce at that level and a continuation of the bull trend towards the 1400 level. A break below the trend line and we can expect gold to try to make a move lower towards 1250.
Also, there is bearish divergence in the MACD histogram. Price is going higher while the MACD histogram is going lower. This shows that the bullish momentum is losing strength and we may be up for a down move that may last some time. We won’t know when this divergence will play itself out but if you are long Gold, do beware.
The Feds meeting at Jackson Hole last Friday 26/8/2016 have given the US dollar bulls a reason to rejoice as there is some indication that we might be seeing a Fed rate hike before December. Strength in the US dollar doesn’t bode well for the gold bugs as investors tend to sell gold and buy the dollar when returns on the US currency increases.
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