Gold Consolidation Continues | November 2013

  • Posted November 24, 2013

On my previous Gold Update Video, I had stated there are Resistance areas to watch for, should Gold create a new uptrend. The first being mid $1300s (Appx $1355-1360 area) and I clearly stated that this trendline is very important because it made up the downward channel that preceded the Crash in Gold. It just so happens that Gold tried to test this trendline, spiked to it, and ultimately failed. This broke any prospects of Gold creating a new uptrend.

When I created the current Gold Consolidation update, there was a mixture of bullish and bearish gold consolidation patterns. Experienced traders usually do not trade such Gold consolidation patterns, nor guess which way something will break out (as this is a gambler’s mentality). It’s best to wait and trade the breakout (an exception to this would be to employ some advanced Options strategies).

One week after releasing this video update, Gold experienced some selling-pressure. However, it is still within a trendline that could very well be the “Neckline” of the Head & Shoulders Pattern (though it’s not a textbook pattern). I argue in the video when the Neckline is at an angle rather than being straight.

Expect an Even larger Gold Consolidation Soon

If I was to guess, I think Gold will break the neckline, re-test the lows $1179/1200, and form a larger Gold Consolidation pattern. This larger Gold consolidation, if it forms, will basically determine whether Gold finally breaks out of this downtrend, or continues towards high $900 – $1000 levels. This will be something I will be discussing next month. So I cannot stress the importance of Gold’s price action in the coming two months.

Gold Consolidation Continues | November 2013

My overall sentiment on Gold continues to be bearish (especially with how US Dollar/Japanese Yen is acting), and I feel the very short-term price action will be choppy, mostly within the price range of $1200-$1300 for the weeks to come. Again, be on the lookout for a larger gold consolidation pattern followed by a large breakout. We will know when the next breakout is soon, because most often, Gold likes to “Squeeze” before it makes a harsh move. I will certainly be updating you all about this within the next two months.

Hope it helps