Gold Outlook Remains Bearish

February 15th, 2015
in gold

by Erik McCurdy, Prometheus Market Insight

The following technical and cycle analyses provide short-term forecasts for the gold market. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Follow up:

Technical Analysis Gold closed moderately higher today, reacting off of recent short-term lows above support at the lower boundary of the uptrend from November. Technical indicators are moderately bearish overall, favoring a continuation of the decline from January.

Cycle Analysis We are 7 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on January 29. The magnitude and duration of the beta phase decline signals the likely transition to a bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is now through February 27, with our best estimate being now through February 17. The latest STCL may have formed on February 11, although we would need to see additional strength to confirm that development.

  • Last STCL: January 29, 2015
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through February 27; best estimate now through February 17.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the middle of the Bollinger bands at 1,265 would predict a move up to the previous short-term high at 1,302.
  • Bearish Scenario: A close well below uptrend support near 1,210 would predict a move down toward the previous low of the long-term downtrend near 1,140.

The bearish scenario is slightly more likely (~60% probable).

Gold Currency Index Daily Chart Analysis

The Gold Currency Index (GCI) is a composite of gold prices in the currencies of 10 of the largest economies in the world as defined by GDP. It is therefore currency independent, reflecting the intrinsic value of gold as an international currency itself. Technical Analysis The GCI closed slightly higher today, holding above support at the lower boundary of the uptrend from November. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from January.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the previous short-term high at 36.39 would reconfirm the uptrend from November and forecast additional gains.
  • Bearish Scenario: A close well below uptrend support at 34.32 would predict a move down toward congestion support in the 32.80 area.

The bearish scenario is slightly more likely (~60% probable).









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