Forecast - 2012-12-20

I had posted on December 6th about the possibility of Cup and Handle pattern for EURUSD pair.
One thing that I missed is that the rebound happened around 50% fibo, not 38.2% as I had predicted.
But the whole scenario seems right, EUR is moving up to the highest level since April 2012. Cup and Handle pattern happened perfectly.

I also mentioned in that post, if gold broke the purple support (which it did), it might go to 1665-1675 area. And that also happens right now.

The question is, how deep will gold go south?
To get the big picture, I will have to use daily chart. Look at the chart below

The first support for this time is the white line support, which has been acting as the support lines from May 16th, 2012 . This line seems quite solid for me. Just look at how many times it supported the price (white small arrows). Most likely in my opinion, this white line will be the limit of this downtrend.
But if gold breaks this support, we still have the second support around 1630 area. Just look how strong that line (area) as the support and also resistance from Mar 14th, 2012. This line seems even stronger than the white line.

Look at another zoom-in daily chart below.

In my opinion, the intersection area between the white line and the brown line will be a good buying area IF gold ever drop that far.

My conclusion, gold is going to have a strong support. Let's see if it can hold or it will also be broken.

Trade well.

GG - 2012.12.20

Interesting Link

Instead of making a forecast or review, I would like to specially put this link in this post:

http://nicoomer.blog.kontan.co.id/2012/12/13/apalagi-yang-anda-tunggu-bagian-2/?utm_source=Jumat%2C+14+Desember+2012&utm_campaign=Kontan+Newsletter&utm_medium=email

This is a very interesting reading with supportive logical and strong arguments.
Since this is the link to the second part of the original author's post, please look for the first part by your self and read that (I recommend to do it).

Good luck.

GG - 2012.12.18

Forecast - 2012.12.18

Gold had dropped down on Dec 13th significantly. I didn't know what the reasons were because USD did not go up. Other pairs also didn't drop like XAU.

It seems that the purple support is more confirmed as the new main trend support because it seems that market respects that purple line and gold bounced back exactly at that line.
After forming a hammer in H4 Chart, gold continue to strengthen until this moment.
If gold can break up the purple resistance and continue to play in the upper side of the purple line, I think there will be a bigger chance for gold to be bullish for closing its price this year.
But if gold goes back downside and enter the previous path (between the purple lines) than there more likely gold will be closed under 1700 for this year.

Trade well

GG - 2012.12.18

Forecast - 2012.12.13

It is now about 45 minutes after FOMC statement.
(Note: the number 3:44:24 is the time left for that 4 hour candle to finish. Means the red candle just run 15 minutes and 36 seconds)
Just exactly as the news predicted, The Fed is extending Operation Twist program which spend $45B a month. It means we don't have any change as current situation. The Fed is spend a total $85B/month for its program.
I guess gold will strengthen but not too much. We have so many resistance above 1730. So, I will not expect too much now for an uptrend.

Seeing at the H4 Chart, 45 minutes after FOMC, it's clearly seen that gold has strengthen to 1723.25  but then has correction in the next candle. From those 2 last candles, which represents 45 minutes after announcement, I think it  gives us a clear view that FOMC announcement doesn't have much effect on gold price.

 Also note the volume when FOMC announcement. There was not big, just as ordinary as other moments. That gives me a picture that market consider the FOMC as an ordinary event, nothing special about it.
 I guess gold will play between my white line and the yellow line (about 1709-1726) for today with a slight upside tendency.

Trade well....

GG - 2012.12.13

Forecast - 2012.12.12

Gold still move around the white line, mostly above the white line. It tried to go lower but failed, indicated that the bear didn't have enough power to push gold lower.
In the other hand, the bull seems also don't have power to push gold higher yet.
I think the market is still waiting for FOMC announcement later tonight (my time) and I'm sure that the price will move significantly at that moment.
If we put the news into account, I believe gold probably will go higher at FOMC announcement because there is a big probability that the fed will announce additional easing to extend the operation twist that will be expired this month. If the fed do that, I believe gold will go higher, and more likely will break my yellow resistance. My expectation area for this scenario is 1730-1750 area.
But if there is no operation twist extension, I think gold will break low, and if it can break both my support, I think it can go to 1675 area. But I doubt gold can go lower than that.
In my opinion, gold will move to both sides (up and down) in a big volatility first before going to the certain direction. So, don't put your SL too close.

Trade well

GG - 2012.12.12

Forecast - 2012.12.11

As predicted in the last posting, the bearish seemed already diminished, at least temporarily.
The very good NFP last Friday might only showed a "fake" truth about US economic conditions, that what I guess what the market considered about that NFP data.
This is may be one of the explanation of why gold couldn't go lower: http://business.time.com/2012/12/07/the-bad-news-behind-the-good-jobs-numbers/

As seen in my H4 Chart above, gold had broken my purple resistance (1) and the white resistance (2) very "easily" in one pass only, but has a correction at the moment. I noted that the move upside happened even after the "good" NFP data. That was unusual at "green" US data and that meant something for me, especially in a strong downtrend path.

I think gold will still stay above the white line for the moment, but I'm also not sure it will go higher in the short term. At most, I think it will be restrained below the yellow line (my resistance from daily chart) because I don't see any strong reason for gold to go higher today.

On the other side, I think gold will not go lower than 1698 for this short term, at least until FOMC.
Most likely it will stay above the purple line (around 1702-1703).

A note about FOMC: I get a feeling FOMC will make gold move to the upperside IF the issue about new bond buying program is announced for January 2013. Let's wait and see...

Trade well

GG - 2012.12.11

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