Gold As Collateral, The Answer To Austerity
Patrick MontesDeOca | Mar 31, 2013 02:26AM ET
Gold is becoming a major source of high quality collateral with its multi dimensional intrinsic aspects. Its lack of third party credit risk and counter cyclical behavior make it an ideal negotiable tool for this purpose.
According to theVC Weekly Price Momentum Indicator of 154.30, it confirms that the price momentum is bullish.
Look to take some profits, if long, as we reach the 154.84 and 155.11 levels during the week. Buy corrections at the 154.26 to 153.95 levels to cover shorts and go long on a weekly reversal stop. If long, use the 153.95 level as a Stop Close Only and Good Till Cancelled order.
If this week’s lows in gold are not violated by closing below this level on a weekly basis, we can build a strong argument that the lows are in and the foundation is in place to support a bigger and stronger move to the upside.
If the lows of this week hold, it will support a rally into the following Fibonacci targets short-term:
1. 162.57
2. 167
3. 172
A close above 172 puts into perspective the upper end of the target zone of 186. A weekly close above this level would set the stage to challenge the highs (186) made in September 2011.
The April gold futures contract closed at 1596. The market closing below the 9 day MA (1608) is confirmation that the trend momentum is bearish. A close above the 9 MA (1608) would negate the weekly bearish short-term trend to neutral. With the market below the VC Weekly Price Momentum Indicator of 1599, it confirms that the price momentum is bearish.
Look to take some profits, if long, as we reach the 1610 and 1624 levels during the week. Buy corrections at the 1585 to 1574 levels to cover shorts and go long on a weekly reversal stop. If long, use the 1574 level as a Stop Close Only and Good Till Cancelled order
If this week’s lows in gold are not violated by closing below 1588 on a weekly basis, we can build a strong argument that the lows are in and the foundation is in place to support a bigger and stronger move to the upside.
If the lows of this week hold, it will support a rally into the following Fibonacci targets short-term:
1. 1684
2. 1730
3. 1776
A weekly close above 1776 puts into perspective and set the stage to challenge the highs (1923) made in September 2012.
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