Back Into the Jumble Zone for Gold

Submitted by Bryan from Pitchfork Playground:

We reluctantly added the most recent pitchfork to this chart a few days ago. The reluctance is because the modified-Schiff fork (red dashed lines) is downward-sloping and we really want to see Gold return to rally mode.

As my late uncle used to say to us kids, “Wish in one hand and spit in the other, then see which hand fills up the fastest.” He was somewhat crude but his graphic saying and the related lesson certainly sunk in. His point was that wishing for something was a fruitless endeavor, it was only by taking action that we accomplish things in life.

Applying that lesson to Gold we have to accept what the yellow metal is doing and not wish for something else. The only action to be taken here is to go short or sit on our hands. Since I don’t short the precious metals I will continue sitting on my hands. Besides, a short trade isn’t really compelling from here since there is plenty of support below the current level.

So what is Gold doing at this point?

The upper median line of the mod-Schiff fork is defining the resistance level for Gold on the upside. The “jumble-zone” is defining support on the downside. I have written more than once about the mess of support and resistance levels in the $1180 to $1190 region and Gold is back in that area again. There is a lot of energy in this region because of the failed triple bottom around $1183.

MACD is still in bull mode (both lines above zero) but the indicator issued a sell signal a few days ago and that signal continues.



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