Gold and the medium term chart view

Medium Term TREND ~ NEUTRAL- (Moving averages (Red) 1229-1224 (Blue)

We discussed last week  with our subscribers that the potential that gold has made a summer low was possible. The test of 1205 the previous week and the bounce back above the moving averages kept the potential alive that gold can move higher from here. The key has been and remains the 2011 downtrend line. A close above 1262-1272 for 2 consecutive weeks would be a bullish turnaround factor of high degree. Price is once again knocking at the door of piercing the line.

As we also said on the last update, if there’s any good news, it’s that a JULY/AUG low in gold (instead of the highs we have been getting) would be more in script of a bullish set up. Now once again gold is at the line. Odds favor a close above 1262-1272 this week would have us turning bullish on the medium term trend and favor that the summer low is in place with gold moving higher the 2nd half of this year.

Summary - THE OVERALL bottom line for now is that the downtrend that began in 2011 is being once again tested. A close above 1272 on 2 consecutive Friday's should be enough for us to favor the downtrend line has been finally taken out.