Interactive Investor

The important levels for gold investors to note down

Deciding if gold can challenge this target level following recent reversal is fairly straightforward.

19th November 2019 08:47

Alistair Strang from Trends and Targets

Deciding whether gold can challenge this target level following recent reversal is fairly straightforward.

Gold (Comex:XAUUSD) 

Our last glance at the yellow stuff in June proved a success as we mapped a movement from $1,357 up to $1,537, weird with the numbers just changing order!

Importantly, our initial target was bettered for a session or two, resulting a situation where future optimism is possible and almost assured.

Unsurprisingly, despite the metal bettering our $1,537 ambition, it was a pretty major target level, one at which we'd expected some hesitation, and the market is currently obliging.

The immediate situation is fairly straightforward, with gold prices seen as suffering due to the strength of indices. We've a suspicion this shall prove a load of tosh at some point soon, once the price of gold exhausts reversal pressures.

Apparently, if gold now trades below $1,454 dollars, it should experience reversal to an initial $1,429 with secondary, if broken, calculating at a bottom of $1,376.

We hope for a serious bounce if $1,376 makes an appearance. Ideally, in fact, any bounce should occur somewhere around the $1,400 mark, "proving" strength in the price and once again entering a cycle which should again challenge the $1,537 level.

If $1,537 is bettered, despite hesitation appearing visually probable at the $1,550 level, it should enter a growth cycle to $1,603 initially with secondary, if bettered, calculating at $1,674 dollars.

Due to the $1,674 once again being a major ambition, some hesitation appears very probable around such a level.
 
To summarise, we suspect the current reversal cycle on gold should bottom around the $1,400 dollar mark.

If opening a "blind long" at such a level, stop needs be just below $1,376. For our future thoughts to prove correct, any bounce from $1,400 exceeding $1,537 is liable to prove quite profitable, until $1,674 makes an appearance.

The reason we're being a little hysterical about the $1,376 level is simple. Below such a point introduces the potential of $1,208 making itself known as "bottom".

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

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