USPOG looks toppy here

I’m always wary of a rising DOW and rising USPOG; it’s a sign of excess USD money in the system looking for a home, confirmed by continued falling USD as it devalues. Right now though, USPOG has a toppy look about it, turning over perhaps. Downside should be a small decline back to the 50MA and anotehr shot upwards to again try for $1000. Continued decline in USD will help this along and there’s plenty to suggest USD is staring into an abyss. Will humungous vested interests be enough to prop up USD? Probably.

Gold

The US Price of Gold (USPOG) looks a little more promising when you step back from it a bit, as the chart illustrates the underlying supprot trendline from Jan’09 which crosses right on that 61.8% fib at $912. It would be a concern for the bulls to see Gold fall beneath there, but you can also see the solid shelf of support at $865 and again at $800. While %R is holding in over sold, RSI is meekly tracking sideways in neutral ground. There is no real indication of direction evident in these. A plan either way is always the best approach and now is a good example of why. While the promise of an uber breakout of the huge Head & Shoulders formation going back to Mar’08 is exciting for bulls, the promise of a wave (C) down to the $600’s is exciting for accumulators.

USPOG Weekly Summary

Concluding a somewhat tedious week, USPOG responded to Monday’s collapse down to the 50% fib retrace and low volatility in the USD, with a 4 day dose of sideways price movement. Was it all boring? Maybe not.

Looking at the zoomed-in chart segment below, we can clearly see current prices are still set within a well formed short term down trending channel, however this past week of sideways prices actually ground out a slight parallel rising channel as the price worked it’s way into the larger resistance trendline.

Bullish? You will be looking for Gold to break out of this immediate resistance, setting up for a retest of the $955-$965 region where the price tends to either bolt up, or collapse down from.

Bearish? A turn back from the immediate resistance trendline would bring the confluence of support at $927, the 50MA and 50% fib into play, though $912 at the 61.8% fib is the logical support beneath that.