XULF Report 16th April
Gold has been in free fall dropping over $230 since Friday and is likely to decline further before a stabilization period. There has been a combination of a few factors that collectively have had an enormous and sudden impact on gold. Cyprus’s gold sale triggering speculation other indebted nations will follow suit, more signals that China’s growth is slowing down, a strengthening dollar and most importantly lowering inflation across the globe.
The decline may begin to lose its speed but should continue before hitting a bottom therefore focus on the 15 minute and 1 hour charts wait for a small retracement followed by a bearish candlestick and execute a short. Application of trend lines will also aid better market timing. This 15 min chart displays two bearish trend lines that could be applied but do be aware trend lines on short timeframes have less resistance/support so price may break the trend lines before continuing its descent. Price has already retraced almost $30 from the low of $1321 this morning therefore be poised to short the market imminently.
Remember that this week is a big week for earnings with one third of the Dow Jones reporting. Also later this evening the German ZEW Sentiment, US Building Permits and ECB President Mario Draghi speaks at a conference which all could instigate more market moves.
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