Gold gearing for FOMC meeting on Tuesday and Wednesday

Gold Daily Report ~ July 29, 2014

Trend
Long Term ~ Bearish- Need a monthly close above 1800 to confirm the bull market final phase underway.
Medium Term ~ Neutral– A monthly close above 1290 and 1322 will move to bullish

Intermediate Term ~ Neutral– Stuck in a trading range of 1280-1340
Short Term ~ neutral- need a close above 1322 for higher

Initial Resistance 1312-1322 2nd tier 1333-1342
Initial Support 1294-1304 2nd tier 1277-1284

The last update listed resistance at 1312-1322 and the high was 1312. Support was listed at 1294-1304 and the low was 1304

Gold overview
Options expiration is done so gold should be released from the 1300 area this week. We have the FOMC meeting that begins today and runs through Wednesday and the August gold contract is being rolled into December. Last trade day in August future is Thursday.

In summary, we’re looking for a push higher into mid-August. The only question is whether we have a visit to 1277-1282 first or if the 1287 low last week was it. If we do get a pullback I don’t want it lower than 1265 area as it will suggest that gold could move towards 1235-1240. On the upside we need to get above 1312-1316 and get back to weekly closes above 1322.

We’re still looking at the pattern be low as the most likely fit.

But when would this chart pattern be violated and cancelled?

IF WE BEGIN CLOSING BELOW 1255, the scenario could turn more bearish and its red flag warning. IF WE CLOSE BELOW 1235-1240, odds will significantly increase that we’re heading for 1180. (The only other support would be 1222.)
If the pattern does survive then odds favor a low between 1265 - 1282 and then a rally towards 1350-1400 developing.


Gold Hourly Chart

The potential that gold is ready to begin its two week rally is at hand. The only thing is the FOMC begins this morning and anything they say can move the market in opposite directions. Resistance is 1312-1316 and 1322-1326. Support is 1302-1305 and 1277-1287.





CYCLES

The cycle inversion is still in play and as long as we remain under the uptrend channel and inside the sideways to lower channel odds still favor the next red cycle turn (July 27th – plus or minus 72 hours) as the most likely place for a potential position on the long side.






HUI
Intermediate Term Trend ~ Bullish
Intermediate Term Moving Averages 240.47- 240.15

Gold stocks are holding where they need to and the bullish posture remains. There’s a price gap at 227-230 on the chart. If HUI can’t hold trendline, that’s where the next target will be.
Keep in mind we are most likely setting up for a buy point as the most likely time for gold stocks to rally THIS YEAR begins near this time frame.




NUGT
Intermediate Trend – Bullish
Moving Averages – 46.47– 46.27
NUGT is in the same condition as the HUI. There’s a price gap at 38-40 that has not been filled, but as long as the trend line hold, NUGT looks like its setting up for higher.




Gold Medium Term
Long Term Trend ~ Bearish --- need moves above 1558
Medium Term Trend ~ Neutral
~Moving averages 1288 – 1285

The medium term moving averages are now only 1 dollar apart for them to cross at 1286.50 and issue a bullish signal on the medium term trend. Of course, gold will have to be above that price in order to attain the reading. So here we are again the medium term moving averages as they are now situated just above the long term green trend line. If the seasonal trends for gold kick in then we should see a rally develop in the next few weeks and that bodes well for gold’s medium term trend to move to bullish mode. But we’ve been here last spring and gold just could not do what it needed in April and May in order to get the bullish reading we need. Let’s see if this time will be different. It is not out of the question for gold to once again collapse into the end of the month like we saw in March, April and May where each time the moving averages were defeated at month’s end. Can it happen again?

Gold remains above the long term green trend line and you can see the massive testing it is undergoing. That is the key at the moment. For if we lose the green trend line then gold can and most likely will undergo another leg down towards 1050-1150.

A close below 1235-1240 would be a high caution flag for us.




GOLD ETF GLD
Gold Intermediate Trend ~ Neutral/Bearish
Moving Average Trend ~ 126.29 – 126.67

Building up for one position, so it’s not a backing up the truck purchase.
This should be 1 stock position in your portfolio – NO MORE THAN THAT.
BGT ¼ of a position at 153 on 3/7/13 and ¼ at 145 on 4/14/13 and ¼ at 131 on 4/16 and ¼ at 125 on 6/20.

The shorter term trend is still bearish in GLD but everything else suggests higher. Price held the trend line test and now we need to get back above 127.50




GDX
Intermediate term Trend 26.59 – 26.52 --- Bullish

GDX also held support and looks higher.




What Next?
Options expiration is done and odds favor gold is about to move higher to mid-August. It’s still possible to go to 1277-1282 and then begin higher but perhaps the 1287 low last week was it.

Bottom Line

A cycle low is due July 25th - july 30th.