Wow, it seems like the daily news stream is almost overflowing. The Middle East conflict(s), crude oil prices, unemployment levels, manufacturing levels, a downward revision of Q1 2015 GDP, PMI, the Federal Reserve’s hint of a rate hike, etc. So how is all this affecting the price of Gold Futures?
Not only has Spring sprung but Gold Futures prices have sprung up a bit recently. Let’s go back and review our projections from previous articles that are listed below for reference:
- From July, 2014 – Gold Analysis Without The Noise, Just The Fibs Ma’am
- From September 20, 2014 – Rough Week For Precious Metals: Gold Charts In Focus
- From November, 2014 – Gold Futures Near Weekly Resistance
- From December, 2014 – Gold Futures Choppy With 1033.4 Target Still Valid
Here’s an overview of the highlights from those research posts:
- Gold Futures has a long-term target of 1033.4.
- There has been continued weakness in the Goldman Sachs Precious Metals Index (GPX).
- The 1179.4 level for Gold is significant.
Now, let’s take a look and see how Gold Futures are faring now. We’ll start with a very basic 5 year chart highlighting the downward channel
Gold Futures 5 Year, Weekly chart
Let’s look at that same channel, only this time we’ll use a 20 year, monthly chart where the downward channel becomes more obvious.
Gold Futures 20 Year, Monthly chart
Drilling down to a 6 month, daily chart yields us more clues as to where gold futures may be headed. In the chart below, we can see opposing targets on the daily versus the weekly. Currently the daily target is 1227.7 and the weekly target is 1148.7 which was hit and provided support with a subsequent move up of 6.16% before a pullback to close at 1198.6 on Friday, March 27th, 2014. Using my Fibonacci method, a close at 1200.1 or higher would have created an upside weekly target.
It’s worthy to note that Friday’s close was only 0.70 above a level that would have created a new downside daily target.
Gold Futures 6 Month, Daily chart
Putting this all together, Gold prices made a low of 1130.4 on November 7th, 2014 and that level was recently tested. The critical support level of 1179.4 was breached on both occasions but has not been able to hold price under it. Now we’ll need to watch the fibs for shorter-term price movements.
However, at this time, I still maintain my longer term Gold Futures target of 1033.4.
Thanks for reading and remember to always use a stop loss order!
This post originally appeared on See It Market