Apologies for not updating my blog for over a week, I have had a lot going on and haven't had much time to spend in front of my screens apart from checking in on my trades and updating them.
Last week we saw another sharp decline - could we have possibly formed a bottom now? Personally, I think there is more downside left in this move.
You can see from my chart below where I see key support and resistance levels on Gold. At the close of yesterdays market, the price is sitting between Support Level 1 and Resistance Level 1 (under the 1300 psychological level). Gold tried to rally up on Friday to get near to 1300 again however it did not have enough power to touch of go through this psychological level and was pushed back down closing the day/week at $1293.
Ideally, I would like to see 1300-1309 re-tested before adding any shorts to my portfolio again, and I would look to see this at the beginning of next week. Monday is the last trading day of the month and next week there is also some high impact news on the way which will bring more intraday volatility to the precious metal.
The way PA has been playing out has been showing extreme weakness in the bulls. In the last 10 trading day, there have been 3 out of 7 daily bulls candle closes - of which have been pushed down from their highest prices of the day. The daily bear candles have been closing much more firmly showing the strength lays with the bears still. Although this may just be a strong correction of the recent upmove, unless we form some sort of base or daily supportive candle with a continuation, I cannot see the bulls taking this much further at the present moment in time.
The keys levels on the downtrend I am now looking at are 1282 & 1262. I see buyers waiting here to take the price back up but how far up only PA can really tell this.
Depending on candle formation on the 4HR & 1HR charts at 1300-1310, I will be assessing my shorts and adding to them looking at SL1 and SL2 to take profits. If RL1 is taken out firmly then there could be potential for the bulls to have regained control.
Next week will show quite a bit of movement but at the current levels I am just going to be a spectator and not get involved in trading this metal until I see the price come to me at either the next support or resistance level.
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