Gold Price Reverses Near Key Rectracement Level

The first chart shows Spot Gold ($GOLD) getting a bounce off the 1140 level in mid March and hitting resistance in the 1220 area twice now. I think the long-term trend for gold is down because of the 52-week low in November. Even though the surge to 1300 looked impressive, gold gave it all back with a decline back to the November lows and the current bounce only managed to retrace 50% of the prior decline. At this point, the immediate trend is up, but this is a counter-trend move. A break below support in the 1180 area would signal a resumption of the bigger downtrend and project a move to new lows.

gold_price_April_13_2015

 

The second chart shows Spot Silver ($SILVER) with a head-and-shoulders pattern of the continuation variety. The prior move was down so this makes it a bearish continuation pattern.

silver_price_April_13_2015

 

The third chart shows the Gold Miners ETF (GDX) with a continuation head-and-shoulders pattern as well. The ETF hit resistance in the 20 area in November-December, and again in March-April. A break below neckline support would project a move to new lows. The indicator window shows the Gold Miners AD Line ($GDXADP) breaking to new lows in late March. Breadth is clearly bearish and this favors further weakness in GDX.

GDX_April_13_2015

 

Courtesy: StockCharts.com

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