Gold has rallied for 5 days and there is a chance it started a long term rally. However, there are a few barriers that it needs to overcome before confirming a long-term intent. Let’s explore the hypothesis from different angles.
Over the strong green period of 5 days gold managed to close above 8 EMA and 50 MA lines. The indicators seem to be turning bullish, but unusually slow for a strong rally. Until a confirmed closure above 20 EMA and a 8/20 EMA cross, this rally could be a corrective wave before going further down.
The weekly candle needs to close above ~$1825 to show a first sign of a bottom.
It looks like gold last week completed an ideal (or very close to ideal) motive wave down that greatly fits into the Fibonacci ratios and the channel. This wave is marked A/1 in red.
The upwards wave that started on Jun 29 has more qualities of a corrective wave. The primary count is red. The blue – alternative.
Forecast (copy from the weekly, no changes):
Gold was damaged greatly in June on the monthly and weekly frames. The odds are on the dark side.
There is no immediate sign for further decline and I am expecting gold to continue consolidation for the next 1-3 weeks within $1750-1815 channel.
As long as the daily candles close below ~$1805, there would be no sign of a prolonged rally. If anything changes, I will address in my daily updates.
If gold is going to make a bottom and reverse, we should see the bullish signs at least on the weekly charts. So far there is none.
The longer term forecast and targets are discussed in details in the Monthly and Weekly Analyses (link below).
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