By FXEmpire.com
The gold markets have been grinding lower over the last couple of months, in a whippy and violent manner. This market is one that depending on how you are playing the market can be highly leveraged. Because of this, a lot of smaller player in the futures markets have been absolutely ground up over the last several months, and you have a lot of traders walking away from the markets at the moment.
However, as you can see by the weekly chart, we are sitting right on a long-term trend line. The recent action hasn’t exactly been encouraging, but it is at times like this that a market will make serious decisions on the next move. The weekly candle is a shooting star, so that is a bit concerning for bulls, but as we stated in our daily analysis, the $1,500 level is the “line in the sand” for us as far as buying. Anything that is printed below that level is a reason to sell in our eyes.
The trend line would be considered broken on a weekly close below it or even a daily close below the $1,600 level. This is our guide, and as long as we can stay above those two levels, we are only buying or stay flat.
The market would become bullish again if we can get above the $1,700 level. The area has been resistive lately, and if it gives way – we could go much higher. The $2,000 an ounce theory is still out there, and as long as we stay above the trend line we see that it could happen by the end of the year. After all, this market can sometimes move as much as $60 in just one day.
The buying of this market is the only thing we can do presently, and using this trend line as a guide can direct us going forward. Also, if we get that close above the $1,700 level, we would be more than willing to add to any longs that we have at that point.
Gold Forecast for the Week of April 16, 2012, Technical Analysis
Originally posted here
