For a month, gold has been trading in a very narrow range from 1283$ to 1310$. There is a variety of things taking place below the surface of the gold market calm this month. This superficial calm is assumed to clear space for a drastic price move down or upwards the coming days, when gold breaks out of its current triangle.
A break through the triangle support at 1283 is possible. This might lead gold to fall – in the secular bull market – below its previous course low of the correction running since 2011, to test the 1200-1180 region again. That is likely to happen in case the too regular, seasonal weakness of the coming 4-6 weeks prevails. The keyword is summer doldrums…
However, if the physical demand rises, due to the geopolitical tensions, Europe’s swing to the right, and the revival of the Indian gold purchases tracing to the ease of the Indian import duties, gold might test quickly its monthly GUNNER24 Main Resistance at 1372$ as well.
In chart-technical respect, the current triangle pattern may be interpreted as a consolidation in the daily uptrend running since 01/01/2014, but as well as a bearish formation in the overriding weekly downtrend running since September 2011.
If ultimately the force of the short-term daily uptrend prevails above the long-term weekly downtrend, the upwards break will follow. If the triangle is taken downwards during the coming days, the weekly downtrend will have won being likely to be re-tested the 1200-1180 during the coming weeks. In this case, the triangle will have to be interpreted as the half-way pattern of the down move that began by the middle of March.
The daily gold uptrend disposes thoroughly of considerable power in 2014 - in terms of price as well as fundamentally. Anyway, in 2014 gold is performing out the US stock markets distinctly. Even though gold has been treading water for perceived months, there is a permanent bashing, the US Major Indexes keep on producing one all-time high after another in 2014, and the analysts as well as the media parties just act in a pushing and euphoriant way, by a look at the absolute performance of 2014 things are relativized. Taking last Friday as deadline, gold has risen by a +7.48% in 2014 whereas the S&P 500 has dragged itself about with a plus of 2.8%...
The geopolitical influences – mainly Ukraine/Crimea – as well as the gold + silver manipulations by the leading western Big Players = US/GB/EU banks leaking out increased, i.e. getting public, and the fact that Russia has been interfering reinforced into the so far western-dominated and –controlled gold-, palladium, and platinum-markets, seem to lead to the circumstance that the frequently inflating US Hedge Funds reflect thoroughly at present that further concerted short-attacks would not be crowned with success, in short- and long-term respect.
Currently, the US Hedge Funds are running scared to be caught on the wrong foot somehow in the gold- and silver market, as to my impression. All those Americans are avoiding risks. Their financial preparation makes them always do safe things and bet on safe things only. For the last decades, in the gold- and silver market they have been acting in an environment they could control and determine absolutely.
Its manipulation in the conspirator’s slang. Yet the truth, I mean the US American truth, has always implied that most money is made where control is largest. If they lose control on their "home markets" – due to of geopolitical, economic or governmental influences – like hell they will accept risky bets. For safe actions only, they are trimmed and trained. Even so the US boys, i.e. the US Hedge Funds, FED and the big US banks this year are playing in addition against Russia in the precious-metal area. China has been the most active counter-part of the Americans for years in the gold market, after all.
Although Putin says that Russia is not playing in the financial markets, in my opinion indeed they do. For sure, Russia is selling US bonds in 2014. These statistics are well known, and Brussels has to support already.
Wherever Putin is able to, he assigns the price rise respectively support measures of the precious metals because thereby the avails for his "empire" is increased. Platinum and Palladium, both being still much narrower markets than gold and silver, are pointing pitilessly upwards since February. Since the beginning of the Ukraine crisis they are, higher highs and lower lows in 2014 = uptrend on weekly and daily base are to be seen. Since Russia has up to a 50% of market participation in both metals, the higher PA and PL prices are flowing directly into Russia’s pockets.
I think, this is why he – Putin – is actively supporting in gold and silver as well, consequently. 100-200$ less in gold and the 16$ in silver would hit his "empire" sensitively. Russia’s economic increase would cave in damageably thus weakening "him" in his office and making him attackable.
Ergo: If I were a hedge fund, I would really think ten times before betting against Russia combined with China during the coming weeks.
==> All right, it is thoroughly possible that the gold and silver summer doldrums are cancelled completely this year and even that gold and silver will break out upwards the week after next.
The dull summer months = summer doldrums, are conditioned by the investors/traders/Big-Boys-officials around the globe who in turn and revolving go to their well-deserved summer vacations. When the market participants are missing and the volume lacking, the volatility decreases bobbing up and down the markets, mostly on bearish basis, because in that case it is much easier to make good money with short-positions in a thin market than vice versa.
This year Russia is going to work through the whole summer, however!!! the US boys and US traders will go into vacations as always. So this summer the bullish bias might respectively are expected to predominate because Russia will support gold and silver and all the other raw materials that are important for the country respectively inhibit their deep fall. So my tip is that the triangle will finally be left upwards because the US Hedge Funds will do the hell messing with Russia and China during the summer months. They will not want to be caught on the wrong foot. On the contrary, as soon as the triangle’s breakout upwards is confirmed, they will rather join riding the new daily upleg through the beginning of August in the then confirmed daily uptrend.
Above, you see the currently valid GUNNER24 Up Setup in the daily time frame. The March top reached the upper line of the 2nd double arc – red circle. From there, gold fell onto the support of the upper line of the first – green circle. Then gold newly succeeded in heading for the 2nd double arc. This time it was the lower line of the 2nd – blue circle.
==> The 2nd double arc – the upper as well as the lower line – have got the decisive influence when it comes to turns in gold. They are ringing in new swings. The last weeks, gold succeeded in working its way forward into the space between both lines of the 2nd. The main reason for this success is the 1286 GUNNER24 Horizontal that held on daily closing base during the whole May so far.
Hitherto it only permitted intraday dips below the 1286. The fact that gold succeeded now in penetrating into the space between both lines of the 2nd without diving, is a first indication that gold rather wants to go up in order to work off then the 3rd double arc in trend direction.
The next 10 trading days will be decisive now. Narrowly above the current Friday close of 1293 the upper line of the 2nd is situated – orange circle. Technically it’s a monster resistance… the upper line of the 2nd forced gold down mercilessly then, at the March top. Since energy situations use to be repeated at the same magnet this is actually the rule at the first and second tests… - another, likewise powerful new downleg will be allowed to start as soon as the upper line of the 2nd will be reached the next 5 days.
From below, another GUNNER24 Support will come into play the next 5 days, namely the 1*2 Support Angle = strong down magnet for this swing. This one was activated as target for this decline after the 1*1 Gann Angle including negative back-test turned out to be finally broken.
So this 1*2 Gann Angle too is supposed to be worked off within the next 5 days. Before, gold will not be able to try seriously to leave the triangle upwards, technically…!!
My assessment on what is going to happen the coming days is this:
Tuesday, respectively Wednesday, maybe Thursday at latest, the upper line of the 2nd will be reached at 1299-1300. From there, the heftiest decline of the last two weeks will start. This sell-off wave will take place under high volume. Then, the 1*2 Gann Angle will be reached being produced at least one daily close below the 1*2 Gann Angle. I.e., a daily close below the 1280 will be done being the signal for many to go short with target 1200-1180. But at about 1265-1260 – so at the April low environment– gold is likely to begin turning upwards consecutively breaking the triangle and simultaneously the upper line of the 2nd upwards. This estimation is based on many decades of chart pattern recognition in gold. Gold loves the false move, the trap. Especially in case of triangles, nearly always at first it feints the wrong direction.
It will take THREE CONSECUTIVE!!!
daily closings below the 1276 during the next 10 days to activate the 1180 region.
On the other hand, TWO CONSECUTIVE!!
daily closings above the 1302 during the next 10 days will activate the 1372 till the end of July. My bet is that the 1302 will be taken upwards after a false triangle downside break = bear trap thereby prevailing another, although weak, upleg into August.
Just a brief announcement: Next weeks, between Ascension Day and Pentecost, I’ll take a couple of days off. Thus, the next issue of the free GUNNER24 Forecasts will come out again on 06/15/2014.
Be prepared!
Eduard Altmann