NEW YORK (TheLFB-Forex) -- Following is a technical summary of gold, silver and crude oil markets.
Gold Bullion Four-Hour Chart
The break higher on gold bullion from $1,550, which stood as near-term resistance, has allowed a technical test of $1,600 to happen. The sustainability of the move will be determined by the reaction this week to midtier economic announcements and more importantly, to breaking news headlines concerning global government debt levels.
Those looking to get on the long side of gold bullion have missed the boat in the near term, and should patiently wait for a technical pullback that tests $1,550 support. It would seem that buyers will now be entrenched around the $1,525 area. This would be a main price point to gauge the strength of the buy-the-dip pattern of trade that has dominated this year.
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In previous weeks we advised clients that the 100-day simple moving average (SMA) around $1,480 would be a major support point that wouldn't be broken easily and would be a good place to buy. It was from this area that the recent bullish run began.
No new long-term long signals will form on gold until a weekly chart closes at more than $1,620. No long-term short signals will form until a weekly chart closes at less than $1,480.
ABC Potential: The initial A leg move may be in place, with the move from $1,475 to $1,615. Any B leg pullback in price that holds at more than $1,550 this week will set up a potential C leg move that could technically test $1,690.
This Week's Call to Action: Look to buy the next test of support at $1,550. The overall outlook on bullion remains bullish, and a buy-the-dip pattern of trade has dominated for two years now. Any short positions need reduced exposure and near-term targets, and should only be taken on the understanding that gold is currently in a massive bull run that has plenty of support areas.
A four-hour chart algorithm signal was generated on July 5 with a move to more than $1,520 that targeted $1,550. This has now completed its cycle.
