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January 2016 Gold Update
When we wrote our December 23rd update, February gold was trading at the 1070.00 price level but our outlook was for gold to be trading higher into the first week of January. As we stated in our closing remarks: “Gold is testing support today at the 10 and 13 day EMA’s and – if gold ‘shadows’ this 44 year old silver pattern – then gold should rally into the first week of January back up towards the 55 day EMA (blue line – 1093.10) and up as high as the 1103.00/1105.00 price level. For now, as long as gold does not close back below 1045.40 we see a challenge of the 1093.00/1105.00 price level by the first week of January.”
As shown on the chart below, February gold did rally into the first week of January:
After Dec 23rd, gold initially traded down into the last trading day of the year (Dec 31st) reaching the low at 1058.50. However, the first trading day of the new year (Jan 4th) gold immediately rallied and by Friday of the first week in January gold (February futures) had traded up to a high of 1113.10. Effectively, gold ‘shadowed’ the 44 year old silver pattern by not closing below 1045.40 and by rallying up to the 1093.00/1105.00 price level by the first week of January.
What the chart also shows is the 10 and 13 day EMA’s (red/green lines – exponential moving averages) were not able to turn back up above the 55 day EMA last week even with gold’s rally back up above the 1100.00 price level. Therefore, the daily chart remains ‘negative’.
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