Will 2013 be the year where gold breaks above 2000$?

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January 10, 2013
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January 14, 2013

Gold is showing signs of an important bottom just above the 1620$ area. Although it made a new low at 1626, it managed to close above the blue support trend line. We are still searching for the end of wave II as we believe that Gold will rise substantially this year. Our view is that we currently see prices in wave C of II. In other words, gold is still correcting the upward move from 1547$ to 1798$. It has paused the decline exactly at the 61.8% and until now the entire downward move is in 3 waves (A-B-C). The bigger picture we believe gold is following is depicted in the chart below.

 

gold

 

As mentioned many times before, when to buy and what stop to be used is relative to the investor’s risk tolerance. Our favorite strategy is to wait for 5 waves up to complete and important resistances to be broken before entering. In this case one major resistance is the recent high of 1678,80$. Additionally, if prices continue to trade above the blue trend line, that would be a positive sign for . on the other hand would firstly want to break this support and move prices lower and far away from the 61.8% . Investors with short positions should reconsider holding their shorts if 1700$ is broken upwards. The next resistance level is 1725$.

As always, thank you for taking the time to read my thoughts, if you need help trading gold, don’t hesitate to contact me.

 

impulse-wave-rules

In technical analysis, Fibonacci retracements are used to mark potential turning points in a trend by identifying static support and resistance. The most popular potential reversal points are calculated by taking the distance from the low to the high of the trend and measuring 38.2%, 50%, and 61.8% from the top of the up trend (the bottom in case of a down trend).

A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.

The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.

Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.

A term used to describe a trader (bear) who is expects that a particular asset – be it a commodity, currency or product – to fall in value. The opposite of a ‘bull’.

The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.

Beliefs held by the aforementioned ‘bears’ of the trading world, are described as bearish. Characterised by a generally pessimistic outlook on the state of a given asset, a bearish outlook would suggest that a fall in value is imminent. Opposite of bullish.

In technical analysis, Fibonacci retracements are used to mark potential turning points in a trend by identifying static support and resistance. The most popular potential reversal points are calculated by taking the distance from the low to the high of the trend and measuring 38.2%, 50%, and 61.8% from the top of the up trend (the bottom in case of a down trend).

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.