After rallying almost $100 an ounce from the July lows of about $1210 (basis December futures), gold is consolidating its gains. Fundamentally, there isn’t much immediate time frame news from either the fear trade or the love trade. That’s the root cause of this sideways price action, and its healthy. To get some technical perspective on the consolidation, please click here now. Double-click to enlarge this short term gold chart. A small head and shoulders top pattern has appeared, and it suggests more consolidation will occur before the upside action resumes. This scenario would see gold move down towards $1272, and then rally towards $1330. Please click here now. Double-click to enlarge. On this chart, a slightly bigger head and shoulders pattern is apparent. It suggests a deeper correction to about $1250 may occur. I’ve outlined the $1300 – $1330 price zone as a good place to book some light profits on positions bought into my $1220 – $1200 buy zone. From here, investors should be viewing the $1275 – $1245 price zone as a fresh buy zone. Please click here now. Double-click to enlarge this important dollar versus yen chart. The world’s biggest liquidity movers are major bank FOREX departments, and they tend to aggressively buy the dollar versus the yen when global risk is declining. When global risk rises, they will aggressively sell the dollar against the yen.
This post was published at GoldSeek on 22 August 2017.
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