Gold Report 10th April
Gold has now recovered most of its losses from last week even with US equity benchmarks making record highs again. Worse than expected export numbers from China’s Trade data has helped push gold a little higher today and fears are accumulating over the North Korea nuclear threats.
The 1 hour chart has produced a bullish flag which could be a buy signal if price breaks $1591 however the longer this current consolidation continues the less likely another surge will occur. If an upside breakout materialises place a stop loss just under the bullish flags low at $1584. On the flip side traders looking for shorts should wait for a lower high defined by candlestick information and place a tight stop loss just above today’s high of $1590.5. Either long or short trade here will provide a low risk entry belonging to the narrow range consolidation we are seeing today.
Irrespective of the effects of this bullish flag the overall picture for gold does feel bearish when taking into account the frequent new record highs from the Dow Jones and S&P 500, the large scale BoJ stimulus programme, an appreciating dollar and the beginning of the 1st quarter earnings season which, at large, companies are expected to beat estimates given recent growth and analyst forecasts being indiscriminately low since the 2008 recession. Also be aware that price is approaching quite an established trend line on the 4 hour chart and bear in mind there is a recently printed bearish harami therefore a profitable short play is on the cards. Any break through this trend line is likely to run out of steam under the present economic conditions.
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