Seasonal Gold Price Correction on the WayCommodities / Gold and Silver 2016 Feb 13, 2016 - 11:09 AM GMT
Goldvybe writes: Not much has changed since our gold correction commentary post on the 10th (here) except that gold had spiked up to $1263 on Thursday after global equities weakness and continued fears about European banks.
The fib retracements have stayed pretty much the same except now moving up a bit. For the most part, our analysis has not changed as we still anticipate a move lower from the seasonal February high into a seasonal low (March-April) of between $1130-$1150.
Of course gold could stay strong and correct only down to its 38.2% retracement level but if history is any guide, we should see a correction of at least 50 to 61.8%. When gold fired off its previous long-term buy signal on January 20th, 2009, gold immediately shot up to $1007 and by April it came all the way back down to $864.
In conjunction, gold came back down to its 37EMA which is ideal for establishing long-term positions if the gold price has already moved much higher. While we will get our anticipated long-term buy signal on this coming Monday’s open, we would certainly not want to establish leveraged positions this far away from the 8/37EMAs.
Prudence suggests to wait until prices back down to the seasonal low timeframe and anticipated price zone and we should start entering long positions in the late-March / early-April timeframe.
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