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Gold (XAU) Technical Review

Trend: Mixed Momentum: Mixed Sentiment: Mixed Daily Trading Range: High $54 (3.2%)                              
Daily Simple Moving Average Lines: Blue (20 SMA) Green (50 SMA) Orange (100 SMA) Red (200 SMA)  

Gold (XAU) 4-Hour Chart

Gold (XAU) 4-Hour Chart

Technical Wave: The move lower from 1760 to 1550 was the A-leg of an ABC-Down structure, which sent the B-leg up from 1555 to 1650, resulting in the C-leg test of support at 1520. If the next upside bounce fails to break near-term resistance at 1650, the December 2010 price at 1410 could be a potential technical target, however unlikely that may fundamentally seem. 

The near-term overall outlook remains mixed, with strong opinions on both sides as to the merits of holding or selling bullion. There are still compelling common-sense reasons to assume that dips will be bought, in-line with long-term analysis that shows gold to be in a raging bull market. However, the near-term technical picture indicates that shadow central banking cartels control valuations, and may not yet have finished suppressing Gold values.

Buy Support: Bullish traders will be looking to buy any short reversal to 1510, (the swing point area that have proven to be pivotal in trade this year), which could then target 1595 and 1625.

Sell Resistance: Bearish traders will be looking to sell long moves that fail at resistance around 1650 (the 50% Fiboncci retracement area from the move lower from 1760 to 1520) which could then target 1625 and 1580 (the recent swing point low), if global risk markets implode.

Overall: A technical picture that confirms bullion positions are being built for the long haul, but not without some serious tests of near-term support, as global markets are forced to constantly re-price equity and interest rate risk. The 3.2% of daily movement is keeping traders busy. Reversals to main support have been bought so far this year, and nothing suggest that will change, however volatile the intra-day moves become.

This Week: Look for the pattern of buying-the-dip to continue, but not without some major and consistent tests of support, and accept that news-headline related moves are dominating technical potential. The near-term trend and outlook is mixed, but many times this year buying opportunities have come from these set-ups. The intra-day trading range is extreme and signals that massive volatility remains a constant threat. The 200-day SMA area could offer the next main area of volatility if tested around 1625.

Information, analysis and methodologies provided are for informational purposes only, obtained from sources believed to be reliable, and should not be used as a replacement for research by an individual investor or licensed investment professional. In no event should the content of this correspondence be construed as an express or implied promise, guarantee, or implication that profits or losses can be made or limited in any manner whatsoever. No guarantee of any kind is implied or possible where projections of future conditions are attempted.