Gold GC-Mini Market Analysis
The Gold GC-mini printed a strong weekly bull bar closing near its high. This was the 4 consecutive bull bar, with the past 2 bars closing above the moving average with confidence. The market is always in long according to the weekly chart.
The chart is also displaying information that should serve as caution to overzealous bulls. Bears have been able to keep price beneath the psychological number of $5000. Bulls were not able to close this week’s body above the previous bar’s upper tail. Bears have an opportunity to create a lower high by running the price down for a significant 3rd leg. This week printed an outside up bar, typically Al Brooks expresses caution and does not like to buy above these types of bars.
Price is entering the middle of the range where bulls who are attempting to fix their positions will want to get out with a break even. When the bears see this happening they will jump in order to exploit the opportunity of bulls selling their positions. This type of market behavior (human psychology) is common, it happens on all time frames across all markets. Many traders refer to it as a 50% pullback with trend.
Most traders should be cautious buying the high and look to buy down near the moving average. It’s a classic scenario where the market is trying to prove whether the previous rally was a “buying climax” or a “breakout” that still has more room to run.
This next week will be critical for both bulls and bears in shaping the psychology of the gold market.
The Weekly Gold chart
- Bears want to keep price beneath the psychological $5000 mark.
- Bears want to create a lower high in order to continue to control market structure.
- Bulls want to keep pushing price up. Ideally back to all time highs in order to get a full break even.
- Bulls showing strength and determination by printing 4 consecutive bars.
- This week’s bar closed on its high, providing follow through, a solid buy signal.
- Price is in the middle of the larger range. Expect a battle for control in this area.
- Bulls closed 2 consecutive bars above the moving average.
- This week was an outside up bar.
The Daily Gold chart
- Despite the week ending on a bullish high note, the daily showed volatility. Evidenced by the 2 consecutive bear bars printed mid week
- Simultaneous bull channel and bear flag.
- 11 of the past 15 bars have been bullish.
- Bears want to defend the midrange, sending price down for a 3rd leg.
- Bulls want to follow a through bar after Friday’s strong bar. This would be a solid buy signal.
- Bulls are trying to get a leg up that matches the previous leg after the parabolic correction.
- There are triangle price magnets at 5025 and 5217.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
