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Why are Gold prices dropping?

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Anton Nel
37618
Anton Nel 2013.05.14 16:46 
Can anyone really predict the future - where gold will be in short term, med and long?
Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 17:38  

Why? I think - it is basicly because of fundamental factors: inflation and so on ( i mean: there is fundamental analysis, and there is technical analysis).

As to "where the price will go to" so just look at the chart on MN timeframe (technical analysis):

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XAUUSD, MN1, 2013.05.14

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gold possible breakdown

XAUUSD, MN1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


Chinkou Span line (light blue line on the left side of the chart) is very near to be crossed with historical price from above to below for possible breakdown, and the price is having 1321 support line on the way to downtrend. So, I think, if price will be falling for the next months so the "bottom" may be this 1321 support level. 

Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 17:44  

But the situation is not as dramatic as some fundamental analytics are predicting about - you can see this monthly chart:

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XAUUSD, MN1, 2013.05.14

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gold not drammatical

XAUUSD, MN1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


I mean: gold was on bullish during the many years and it is on primary bullish up to now: price is above Ichimoku cloud, and the border between bullish and bearish (Sinkou Span B line) is the other boder of the cloud. It means: if the price will fall dramatically so the total reversal will be somewhere at 1275 or 1109 (depends on the situation for example). So, gold is on bullish as primary trend on MN timeframe. :)

Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 17:48  

Yes, I agree - if the price will cross 1321 support level from above to below so it may be 'a signal' for near future possible reversal of the trend to primary bearish.

But ... if we attach Stochastic indicator and Demarker indicator to see oversold/overbought levels - we will receive the following situation on MN timeframe:

 

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XAUUSD, MN1, 2013.05.14

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gold oversold

XAUUSD, MN1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 17:58  

As we see from demarket - the price is in oversold condition; as we see from Stochastics - the price is very near to be oversold. I think - "the bottom" is somewhere about 1321 ... 

Some people said that inflation will be increased and our life will become more worse (in the end of this year), and because of that - price for gold will go to uptrend (in the end of 2013) :) But I think - resistance levels for uptrend are 1723 and 1795 (2 stong resistance levels) ... so ... 

The price is oversold for W1 timeframe too (and nearest resistance is 1590 for example) ... and it is already bearish for W1 and total reversal to primary bullish will be somewhere about 1621 (if the price will cross this level so it will be primary reversal to bullish for this W1 timeframe).

But there are as many resistance lines for the price on the way to uptrend so I do not expect good uptrend movement in the next few months sorry ...

I think - the bottom may be 1321 ... 

graziani
1968
graziani 2013.05.14 18:48  

you don't need any graphs: swap is positive for sell.

anyway, it looks like wave 4 (monthly graph). 

Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 19:22  

If we will speak about patterns so we can see here (Gartley):

 

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XAUUSD, W1, 2013.05.14

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Gartley W1

XAUUSD, W1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 19:24  

And this is retracement - finished pattern (for downtrend):

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XAUUSD, MN1, 2013.05.14

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w1 retrecement finished pattern

XAUUSD, MN1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


And this is same pattern but it is developing up to now:

 

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XAUUSD, MN1, 2013.05.14

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developing

XAUUSD, MN1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 19:27  

And this is Bat

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XAUUSD, W1, 2013.05.14

MetaQuotes Software Corp., MetaTrader 5, Demo

bat uptrend

XAUUSD, W1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


and this is crab

MetaTrader Trading Platform Screenshots

XAUUSD, W1, 2013.05.14

MetaQuotes Software Corp., MetaTrader 5, Demo

crab

XAUUSD, W1, 2013.05.14, MetaQuotes Software Corp., MetaTrader 5, Demo


 

Sergey Golubev
Moderator
94526
Sergey Golubev 2013.05.14 19:28  
So, the price will go to uptrend ... but not now and not immediately : i think - the correction will be continuing for some time, besides - most those patterns are developing/forming ones so ...
Mirza Baig
2383
Mirza Baig 2013.05.14 20:15  
Wow NewDigital...which system you using for those chart patterns ? :)
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