Gold generated a new IT Trend Model (ITTM) BUY signal as the 20EMA crossed up through the 50EMA. In the last year there have been six ITTM signal changes, and price has been running flat for six months, a configuration that facilitates even more whipsaw. There is, however, more to the picture than is visible on the daily chart.
On Friday I wrote: For several months gold has been in a trading range. Considering that the dollar (UUP above) has been falling during that time, we can conclude that there is an intrinsic weakness in gold that offsets some of the advantage it should gain from a weak dollar. Gold is heading to the top of its current trading range, but there is significant resistance being encountered right now that is not visible on the daily chart. (See the weekly chart below.) It would be most encouraging if price can reach the top of that range. Sentiment is still negative.
The weekly chart won't be final until Friday, but we can see that good progress has been made as of today. Quoting again from my Friday blog: Gold has been turned back from the declining tops line numerous times in the last two years. It is currently attacking that line again, and the rising weekly PMO offers some hope that a clean break will finally take place. As of today a new weekly PMO BUY signal has been generated. This is good to know, but, again, the signal won't be official until the close on Friday, and the picture could change by then.
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