Gold Beware Of News Events

Gold rose at the end of last week on a data release. Short-term traders and no doubt news driven algorithms stepped in to bid gold up towards resistance. We believe these news events act as a catalyst to relieve oversold or overbought conditions. They do not alter the structure of the larger pattern but just the detail on the way there, prices can move randomly over the short-term within these much larger patterns.

Below is our current 5-day forecast which shows we are of the opinion that this rally will fade and we will soon be completing our much larger structural pattern with the re-test we have been waiting for since the gold break out at the start of the year.

We feel that regardless of the long term direction of gold there should be support at about $1170, once that is reached we would need to regain $1200 relatively quickly before looking at our next target. Our targets on the way down are $1220 and then sub $1200 for our final re-test.

An event like Friday has created a consolidation breather in an ongoing downtrend. Unfortunately, it is not always possible to know if these consolidations will occur or not. In any case they do not alter long-term trends. As far as we are concerned these sort of pricing events driven by news should never be chased as they tend to fade and create the conditions for a sharp reversal.

You can follow our intraday gold forecasts on our website, we post regularly on our twitter account which is on our homepage. Our forecasts are fractal patterns that last for months and years, we monitor the development of these probable patterns continually to ensure we are on track. Our methodology is to create a most probable long-term fractal pattern and then continually test it and model it over multiple time frames to ensure the pattern remains a probable event.

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Come and see how we monitor our most probable gold forecast on an intraday basis http://www.kenticehurst.com