Gold continues to post strong bull candle after strong bull candle [Video]
|Gold
Calling the top in a market that is so strong and continues to push ever higher into new high ground is a task fraught with difficulty. Aside from daily momentum indicators remaining incredibly strong, gold continues to post strong bull candle after strong bull candle. There is a degree of consolidation forming this morning, but this can often be seen in front of Nonfarm Payrolls. The RSI is still at record levels in the high 80s, whilst there is nothing on daily MACD or Stochastics which suggests any slowing or impending reversal. However, there is no getting away from the fact hat gold is extremely stretched and the risk of a significant correction (as the elastic snaps back) is mounting. There are signs of something brewing on the hourly chart though. We mentioned yesterday the development of small negative divergences on hourly momentum. These signals are growing, especially on hourly RSI where there has been a “failure swing”. The initial support this morning at $2048 needs to be watched now. A mini top formation would form below $2048 and imply a test of the pivot at $2029 support. The overnight high of $2072 is now the all time high and is initial resistance.
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