Today, DecisionPoint reported a new Intermediate-Term Trend Model Neutral signal on Gold to Timer Digest. The signal was triggered when the 20-EMA crossed below the 50-EMA. It wasn't a SELL signal, as the 20/50-EMA crossover occurred above the 200-EMA. Don't let the "neutral" moniker fool you, though; Gold is looking quite bearish right now in all three timeframes and, full disclosure, I sold my GLD stock.
Today, a significant price drop pulled price below what had previously held as strong support. The breakdown is not "decisive" - a decisive breakdown would be a move of 3% or more below support. The 200-EMA held today, albeit barely, as price closed above it. That's about it for good news, though. The PMO failed to hold two BUY signal, one at the end of March and the second from last week. I dub these failures as a "bear kiss." It's basically a bull trap. The SCTR is falling fast. There are still high discounts being recorded on Sprott Physical Gold Trust, which suggests bearish sentiment. Sentiment being contrarian, that is considered bullish for Gold. I would look for more climactic discounts.
The picture is gloomy on the weekly chart. The best you could hope for would be a flag formation coming together. However, the PMO is ready to log a clean SELL signal. Note that discounts are not that climactic right now.
The monthly PMO ticked downward, breaking its strong rise following a PMO BUY signal. Most important on this chart would be the failure of price to test the top of the trading range it has been in since 2016. The previous three rallies challenged that overhead resistance, while this last one did not. That could be a caution flag for traders.
Conclusion: Long term, Gold is showing weakness as it failed to challenge overhead resistance. The weekly chart is negative, with the exception of a possible bull flag formation. I would look for lower prices, given the weekly PMO is about the trigger a SELL signal. Another problem for the intermediate term is the 20/50-EMA negative crossover on the daily chart. Overall, it's not a good time to own Gold.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting!
- Erin
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DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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