As far as I can tell, last Friday's GDP #s marked some type of intermediate low for the Dollar. It bounced off of that 81.3 area every time so far. With the EUR and GBP coming off multi-decade highs, I would place high odds that the DX is going to breakout from this wedge. This off course should place added selling pressure on gold and silver...
I think were still headed lower. 640 would be the first support area to look for a low but if that doesn't hold, then 600 is a rock solid support platform. Gold had everything going for it the last 2 months and simply refused to break to fresh highs. All the reasons as to why gold couldn't break higher are irrelavent in my book. There simply was not enough horsepower or demand behind the price to take it over $730. Normally the hangover from such disappointments in gold from investors/funds leads to some serious liquidation of long positions...
665 cash support blown out as expected. We'll likely see a rebound to 665-670 on cash gold before the next wave of selling hits. Looking for a low in the 635-642 area by mid-June or so. If the commercial interests begin to massively cover positions at the 640 area, then gold can still maintain it's series of "higher lows" which is bullish from an intermediate standpoint. If 640 cash holds then this would likely be the low for the remainder of the year imo...
Do you not think the trendline in the attached chart will hold at around $655-$660? If not, then why? Of course, we'll know for sure pretty soon.
We got the rebound back to resistance at 665 last night and of course the selling resumed shortly thereafter. Looks like we have hit some kind of short term low right at 655 however the quality and thrust of the bounce should tell traders how far up the rebound will be. My guess is we can see GCM get back up to 660 before more selling reappears. The trend and momentum is very weak now so I wouldn't expect much strength for quite sometime. Given the fact that June FND is coming up and the COT is likely even more short this week, my target of 635-642 cash still stands...
Thanks for posting the chart. As of right now GCM is at 657 so support appears to be broken on this particular chart now. Support trendlines only work so well for gold when they hold but once they break, then traders recognize the opportunities to sell and hence the snowball effect occurs. I look at other things then just the charts such as how the commercial interests are positioned. These are the largest and smartest players in the gold market and traders that wish to fade them are likely to get burned in a big way. Once we see these entities clear out their short positions in a significant manner, then traders should look for an intermediate long entry...