Production Stalls Driving Dollar Down And Gold Up | The Gold Forecast

Production Stalls Driving Dollar Down And Gold Up

May 15, 2015 - 4:09pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

 

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Gold Forecast: Proper Action

This morning we sent ot a trade alert: 

Buy Gold @ market (current 1224.80) place protective stop below 1208

Buy Silver @ market (current 17.56) place protective stop below 17.09)

Maintain both long gold and silver, maintain current stops

Gold Market Forecast

Considering that gold prices began this week well below 1200, with the intraday low of the week at around 1180, and closed strongly higher at around 1224 per ounce, we have seen quite a key reversal and turnaround in the precious metals markets.

Of course, we can partially thank weakness in the U.S. dollar adding fuel to gold’s current fire, as well as short covering and true buying-the-dip mentality.

The key to today’s price activity is that we started off the week trading just above a former resistance level at 1221 to 1223. The importance of the fact that gold prices were able to recover so significantly and to trade and close above former resistance cannot be overstated.

On today’s video report we will highlight and illustrate a pattern originally identified and named by Steve Nison called a ”scouting party." This particular pattern will unfold if a particular market price is testing a current support or resistance level. In this case it is a resistance level that we are testing, and the thought behind this pattern is that initially we will see the market trade into and above resistance to test the fortitude of the bearish faction. If the bearish faction remains strong, prices will quickly drop below resistance and begin to trade lower. If the bearish faction is weak, action will move the price above former resistance to form what Nison has termed the “beachhead." It is from this point that prices will trade above former resistance and in essence turn that price point into support. I believe that this pattern is currently unfolding in gold.

 

Sentiment Indicator: