Forecast - 2012.12.07

Just as expected, NFP gave a high volatility today.
Gold still moved in the green path before NFP and then broke up right after NFP.
It was really unexpected move since the NFP data was very good for USD (really green, see attached picture above).
Maybe it's too early to say, but that move gave me an impression that bearish mode is almost over.
With very good NFP (64% more than predicted), gold should drop much lower than that. At least, it shouldn't go upside that quick.
I don't know what is the reason, but this is an abnormal reaction of the market. Anyone must trade with cautions. Even more we are facing the end of the year when many traders will be off from the market and the volume will decrease significantly. In that kind of situation, usually little volume can make high volatility. Better be more cautious.

My personal opinion is still bullish for 2013. The last data that I wanna wait and see is the FOMC meeting next week. It may give a significant direction since this is the last FOMC meeting before 2013, when the fiscal cliff will go or not go.


For the short term:
Looking at the 4H chart above, I guess gold will begin sideways between the purple lines.
Gold needs to break the white line to be considered as bullish mode.
In other scenario, gold must break the purple support at the bottom to be considered as bearish mode.
The move between the purple lines will be considered as sideways, as the most likely scenario for me at this moment.

One more additional note from me:
I read comments from many traders in FF site. I think it is not logical to say that QE will be stopped in this short time. Why? It's very clear that the economy crisis is far from over yet and stopping the QE at this time will make a worse condition in a sudden and damage the recovery that begin (?) to develop now. We are still in an uncertainty at this moment and printing more money seems to be the only solution for many countries. So as long as the governments of those countries can't find another solution for the crisis, QE will not stop earlier than those other countries's money printing.

I still believe that QE will run at least until the second half of 2013 and won't be stopped just because one or two months good data. Only time can tell....

Trade well....

GG - 2012.12.07