Today's Gold and XAU Forecast

Monday's XAU Forecast:

XAU is falling now on PROGRESSIVELY DECLINING VOLUME, and that is setting up a BULLISH SPRING condition. Now just as a bearish upthrust can persist on light volume that pushes the highs, a bullish spring condition can persist as the light volume continues to push the lows and such is the case now with the XAU. Now the XAU did close up fractionally on Friday, but we don't regard that as any kind of a sign of strength just yet. With the bullish spring in play, it can still be canceled by further volume events to the downside or it can execute and push higher into the next resistance levels. In this case we have support now at 161, 157, 154, 151 should stronger volume come here and bust this down, or we have overhead resistance at 164, 167, 169 and 171 should the bullish spring execute. Even if it does spring here to higher prices, that can just be a test and not a trend change and that is always determined by the price and volume action. So we do think this is going to make a move here pretty shortly but as a matter of respect for the bullish spring outcome, we pulled our short position via the DUST 3X short miners ETF. So that pretty much describes where we are at this point, in neutral. We'll watch for now. More on gold later in the forecast.

Monday's Gold Forecast:

Gold gapped down on the daily chart on Friday and on MUCH STRONGER VOLUME. We almost ran out of support pivots as the low was at 1626, per our forecast. Gold managed to climb higher to close at 1649, minimizing some of the damage, but we did see the strongest volume day in the gold contract now since the volume off the top day of 11/28. So at this point since there was a strong hourly bounce off the low, it's possible we're going to see a little more of that loss retraced. For now we can place the daily resistance at 1665, but want to note that the 1626 low is now consistent with a retest until cancelled by other price and volume events. We see the hourly resistance now at 1654 and the hourly support around 1631 here. Most of the damage was done on light volume in the overnight session, and we regard that as a shakeout setup. The problem is that volume did build on the shakeout, so we'll see what they can do with it going forward, if they can make that volume work for them as support or if the sellers come back in here and bust it down again on stronger volume.

Thanks Semi!

So, tying this back to the currency thing. The B of J has done about $1Trillon/worth of Q.E. so far or announced it. There's a rumor this morning that they are going to DOUBLE it. That puts gold and the US$ into schizophrenia. As the market tries to decide whether or not Japanese QE should be priced into gold. The problem is that gold has been trading against the US$, which stands to benefit from the Japanese QE. That's why it is stalled here, and mark my words, when the market finally decides whether this is good or bad for gold, you can bet it's going to be a SIZEABLE MOVE now with all the compression under it here...

So, tying this back to the currency thing.

The B of J has done about $1Trillon/worth of Q.E. so far or announced it.

There's a rumor this morning that they are going to DOUBLE it.

That puts gold and the US$ into schizophrenia.

As the market tries to decide whether or not Japanese QE should be priced into gold.

The problem is that gold has been trading against the US$, which stands to benefit from the Japanese QE.

That's why it is stalled here, and mark my words, when the market finally decides whether this is good or bad for gold, you can bet it's going to be a SIZEABLE MOVE now with all the compression under it here...

With cheap volatility driven by our Fed, it sounds like a March straddle would work.

an interesting theory for sure
of note, golds long rise these past years has been in an environment of the yen rising against the USD:
now that that trend is in serious doubt, wither gold?

http://scharts.co/Wx2O2d

So, tying this back to the currency thing.

The B of J has done about $1Trillon/worth of Q.E. so far or announced it.

There's a rumor this morning that they are going to DOUBLE it.

That puts gold and the US$ into schizophrenia.

As the market tries to decide whether or not Japanese QE should be priced into gold.

The problem is that gold has been trading against the US$, which stands to benefit from the Japanese QE.

That's why it is stalled here, and mark my words, when the market finally decides whether this is good or bad for gold, you can bet it's going to be a SIZEABLE MOVE now with all the compression under it here...

So, tying this back to the currency thing.

The B of J has done about $1Trillon/worth of Q.E. so far or announced it.

There's a rumor this morning that they are going to DOUBLE it.

That puts gold and the US$ into schizophrenia.

As the market tries to decide whether or not Japanese QE should be priced into gold.

The problem is that gold has been trading against the US$, which stands to benefit from the Japanese QE.

That's why it is stalled here, and mark my words, when the market finally decides whether this is good or bad for gold, you can bet it's going to be a SIZEABLE MOVE now with all the compression under it here...

Not really, gold is trading daily in size against the big creditor Nations currencies.
These masses of cash paying buyers, don't care what Gold's price in US$ is doing.
Their buying has served them well during the last 12 years.
Its time for the Japanese savers to realize that instead of buying JGB 10-Year yielding less than 1.00% they should have been buying gold which has appreciated by about 50% during the last 3 years.

http://stockcharts.c...id=p64233410254

-tria