Gold and the Medium Term Technical Condition

Gold Medium Term– BULLISH since Mar 11 2016 @ 1259

Moving Averages 1217-1263 (Bullish)

As long as price is above 1217-1263 the medium term remains bullish. The dual yellow line just under the averages is true support and we would have to break below those trend lines in order to go back to a medium term bearish outlook on gold. On the upside, we need a monthly close above the upper yellow line of resistance at the 1372-1388 area. It has now been 9 weeks since the bull/bear battle of the line began. So far, the bears have been able to hold it.

Taking the 2011 downtrend line out would be a statement.

The 2014 high is 1388 and there is resistance at -1422-1438 is we get above 1388. Clearing the 2011 yellow downtrend line would be huge and the rally has gone as far as it can without leaving the bear market channel.

If the bulls get above the 2011 downtrend line they will have control. The most non arbitrary indicator that exists is the 2011 DOWNTREND LINE. If gold is above all downtrend lines, then gold can’t be in a bear MARKET. Do you see the triple green uptrend line just above the 2011 downtrend line. That’s the momentum line from the 2005 breakout. Once gold is back above that line, it will be in high gear. In summary, until we get above the 2011 downtrend line, a medium term correction remains in play. With that said, watch 1388. If we move above it, another good move up could develop to the triple green line. Until then, we continue (as we have since July) to favor a medium term pullback is in play as those are the odds. That Fibonacci 1272 area and the moving averages are the MEDIUM TERM first and 2nd points of support for this pullback if gold loses 1298.