$XAU/USD (Gold Spot) Trying To Ski Through Downtrend, 50DMA Resistance

While I sip on a Red Stripe, I'm watching $XAU/USD (gold spot priced in US Dollars) test a downtrend resistance level and 50 day moving average.  According to this free live chart at fxstreet.com, gold spot is trading at 1105.27 (up 0.55%), the 50 day moving average is at 1109.71 and it's testing the downtrend line as you can see.  I'll do a longer term analysis on gold futures and the $GLD ETF later.  I'll look into gold volatility as well and COT, whatever data is available.  We are at another serious inflection point.  If gold spot can take out this downtrend channel the long side could be in play again, at least in the short term IMO.  If it fails it could see another wave down it looks like.  You can see support from October, 2009 in the near term which hits the triangle vertex point.  We'll see.  I charted out the GLD/SPY ratio a few days ago (1:1), as well as EUR/GOLD which was testing an important low. If the Euro really falls apart here and/or people hit the safe haven ask, will the $USD or $GOLD outperform?

XAU/USD, Gold Spot courtesy of FXStreet.com

Comments

  1. Could be that C of 4 completed at 1044 and the whole thing is a triangle, still, I'd wait until a zig-zag back to the lower half of the triangle to get in heavy. Of course if we're destined to test the 200DMA at arond 1030 then you'll see everything fall hard.

    I remember watching the ticks back when gold broke 1070 for the first time, everything else was getting beat pretty badly, it was like gold was the heaven that all stopped-out trades went to after they died. However the G/S is pretty bearish right now which is why I suspect we'd need one more flush to pull back the catapault al final.

    Besides the Euro, does this whole mass-correlated move look like an a-b-c correction or the start of something new?

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  3. Gold is testing the 50dma right now and pierced both downtrend lines. Gold and AUD are moving nicely. If $XAU/USD can break above the 50d and $1150, then perhaps all systems go to test $1225 and beyond. It just failed to break above the 50d, maybe it will have another chance later. There needs to be definite confirmation for long side imo. Here are long/short term images.

    http://lh5.ggpht.com/_xlGBqqM0muE/S3o6DXBxLXI/AAAAAAAADvM/YCxOnqnBBlU/s800/Screen%20shot%202010-02-16%20at%2012.16.04%20AM.png

    http://lh3.ggpht.com/_xlGBqqM0muE/S3o6Du6mcVI/AAAAAAAADvQ/DeM6iMNZOu0/s800/Screen%20shot%202010-02-16%20at%2012.22.12%20AM.png

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  4. An hour later it cracked the 50dma, it is up 1.29% to 1113.2 http://www.flickr.com/photos/dvolatility/4362016904/

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  6. Well nice 50dma break n' fake for the time being. XAU/USD is back where it was before, under 50dma and it's just above the 100dma. It's in a new channel it looks like and needs to hold $1100 here.

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  7. test http://www.flickr.com/photos/dvolatility/4367471932/

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  8. Wow nice volatility, held the 100d, broke above 50dma again and is up 1.5% while testing upper end of channel on weekly. It does look like a bull flag. It could test 1150, I like the risk above that level (Jan high) for the BIG test, if that shall happen.

    http://www.flickr.com/photos/dvolatility/4367487357/

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