Wednesday, July 19, 2017

Sentiment among Wall Street analysts changing on gold as calls for a return in price to 2006 highs back on board

Even with another naked short contract dump/flash crash on July 19 by a bank, HFT Algo, or other source, it has not dissuaded gold's recent climbs back over its 200 day moving average of $1240.  And with the Fed suddenly shifting their rhetoric to a more Dovish direction regarding interest rates, sentiment among Wall Street analysts like Goldman Sachs are forecasting a return in gold prices to the highs we saw back in 2016.

The setup here is looking a lot like USDJPY. It tested/held two equality targets from the April/June at 1,215-1,205. This implies that the pullback was in fact corrective/not impulsive. Daily oscillators have diverged positively from the bottom of their recent range. The break above 1,236 further confirms that the market is now rising in an impulsive (and has room to continue). The next level to focus on is 1,249 (1.618 off the July low/ 100-dma). As long as pullbacks avoid overlap with the Jul. 12th high at 1,226, the underlying bias should remain in favor of higher levels. It’s also worth considering the notion that Gold may be in the (C) leg of an (ABC) pattern which began in Dec. ’16. If that’s the correct interpretation, the next leg higher could eventually continue up towards 1,378. How price action develops at ~1,296 (double highs from April/June) will likely be critical. 
Break of 1,236 opens an initial target at 1,249. Target/watch how price develops at 1,296. - Zerohedge


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