Good Afternoon Dynamic Traders

Since Monday’s post on Gold, price has dropped around 80 points in just a couple of days – how quickly the bears move! Price has also convincingly closed below the VI – the last time Gold dipped below the VI was back in 2008 so it’s a pretty significant price move.

Price is now lingering in the midst of a support zone with a weekly TL also adding weight to the situation – so there’s always the chance of a FBO. Jumping on a short trade would certainly be premature at this stage – Dynamic Traders will know exactly why.

The plot thickens – will the bears continue to hold the reigns? We’ll have to wait for the markets to tell us – no preference either way, we just need to hold out for the right confluences.

Smart Trading!

Sonia Molina

Good Evening Dynamic Traders

Gold has taken a bit of a hit today and provided a breakdown of the recent price squeeze I blogged about at the beginning of the month.

Whether todays weakness is news related, fundamentals related or just markets doing it’s thing – it’s doesn’t really matter. The technicals suggest price found some kind of resistance and allowed the bears to step in, at least for now.

So where to next for this precious commodity?

Should price break and close the support it’s at right now, then the next support area is a cluster of the VI, previous support and a figure level – it’s probable price will head there if weakness continues. Price will then need to determine it’s sense of direction from there – go with the prevailing trend or start a new one? Certainly the current range makes for an interesting watch – remember the longer the consolidation, the bigger the breakout. For now, let’s be patient and hold tight.

Smart Trading.

Sonia Molina

Good Evening Dynamic Traders

We’re in the final month of 2011 – I’m still finding it hard to believe! It’s come around so quick.

I wanted to end the short trading week with a quick update on Gold. The last Gold blog we could see price had reached a support cluster and odds suggested a bounce up. Price did just that and so far this week has been a bullish one. Price is squeezing between the trendline/support below and resistance above – a break above is our preference for a trend trade.

As we’ve also ended another trading month, I wanted to zoom right out into the monthly timescale to give us a longer term perspective. We can clearly see the trend has been heading north forever and in a noticeably linear fashion, without any deep pullbacks. I’ve highlighted the recent and pretty sizeable tramtrax formation, which could suggest a possible reversal/correction is on the horizon.

Looking back at the daily chart, it’s no wonder price is in a bit of a range right now – the longer-term traders are fighting it out. For the safer option, a break of the major figure at 2,000 would be the preference for a continuation, but for those who are more risk savvy you’ll be waiting to see which way prize squeezes out.

Remember not to get caught up with all the hype and news – focus on price.

Have a great weekend folks.

Smart Trading.

Sonia Molina