Gold has been, I guess along with the S+P last year, a little tricky to forecast. Seemingly other outside factors can push this market around more so than others. I try my best to stay on top of this each day, but in saying that I feel you always have to have a "plan B" in case what your initial instincts are telling you, turn out to be incorrect.I've done exactly that in this case with two scenario's for Gold prices going forward, a scenario A (top chart) is what I feel has the highest probability of playing itself out from a technical aspect, but I imagine from a fundamental aspect also.
I've also added a lesser likely (in my opinion) scenario in case we get a breakdown from the double bottom low around 1535 on Gold (Bottom Chart). If this plays out with a breakdown scenario B will the one in play. Proving once again Technical Analysis is an art and not an exact science.
To the charts; my most likely scenario played out in the top chart has a box range outlined which took Gold to it's all time high above 1900, a trading range has proceeded between roughly 1800 and 1550. I really would like to see a break above 1800 to feel better about the upside targets being hit. In any case Gold should find at least short term support at the levels indicated on this top chart, longs should be looking for anticipation of that breakout and targeting first the big 2000 level which is more psychological than technical, and the main upside objective would end up being a little above 2100.
Scenario B on the weekly chart (bottom chart) forecasts prices going forward on a break below this trading range in Gold. Downside levels would then be very much in play going forward with a maximum downside being around the 1100 level. Bears should be selling around that 1800 level or the top of the range in anticipation of the breakdown of the range, and looking to cover at projected support targets.
