With the world closest to World War 3 since the cold war era and Russia about to unleash escalating sanctions of Turkey, it makes perfect sense that ‘investors’ would want to purge themselves of precious metals. Someone decided that Friday after Thanksgiving would be the perfect time to dump over 18,000 contracts (around $1.9 billion notional) sending the price of gold futures to their lowest since Oct 2009, below what Goldman called a “crucial level.”
Over 18000 contracts dumped…
Sending gold futures prices to Oct 2009 lows…
As Goldman notes, in Gold, the critical level is 1,068-1,066. In Silver, support spans 13.98-13.83.
Gold Daily/Weekly – The level to watch in Gold is 1,068-1,066. This includes an ABC equality target off the January high and the trend across the lows since Dec. ’13.
The fact that oscillators are diverging positively suggests that price may be attempting to stabilize. Failure to break this support area confirms that the setup is still corrective; that a 5-wave sequence from ’11 highs ended in July. Alternatively, a break lower would warn that the market hasn’t yet completed its impulsive decline.
This would open potential to extend towards 966 (a 1.618 extension target from the January high).
Silver Daily/Monthly – The level to watch here is 13.98-13.83. This includes the previous low from Aug. 26th and the trend across the lows since Jun. ’03.
Although the wave count on Silver is a lot less evident than the one for Gold, it is apparent that rallies have all met ABC targets insinuating that rallies lack impulse. On a more positive note, daily oscillators are crossing higher from the bottom of its range.
Put another way, the balance of signals seems mixed; 13.98-13.83 does however look significant.
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