Cautious on Gold - Market Analysis for Sep 19th, 2012

In reaction to the BOJ Easing Announcement of more QE last evening, spot gold popped to a new multi-month high at $1779.77, but has since come off of those highs into the $1768 area so far.

Although the minor weakness has not inflicted any significant damage to the post-Aug 31 upleg from $1646.22, let's notice that this morning's new high was NOT confirmed by my 4-hour momentum gauge, which, if nothing else, is a warning signal that the near-vertical 8% upmove is tired and, in the absence of a very bullish catalyst, could be on the verge of a correction.

That said, spot gold must break below key near-term support at $1755/52, which is 170.40/00 in the SPDR Gold Shares (GLD), to trigger downside follow-through towards $1725, or GLD 166.50.

It’s time to be a bit more cautious in gold right here.


  Matched
x
  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!