Technical Analysis of Indian Equities by Nooresh

Gold –Possible Top out on Long Term Charts

GoldTopout

 

If we look into the long term charts of gold on log scale. ( Log scale takes into calculation percentage based moves and not absolute so gives a better picture for long term trends.)

 

We have tested the top of the long term channel at 1900-1950. Every time Gold has touched the higher end of the channel it has ended up correcting 15-20% also over the next few months. ( Also its

 

Although there would be many arguments of Gold being a good hedge to inflation or a great long term story but at current levels one may pause a bit on Gold Buying and if you have not bought gold yet its better not to take exposure to it.

 

This is purely from a market perspective and from current levels i would at least expect the pace of gold rise will slow down and downside risks seems more higher.

 

If one has to enter i believe a technical entry point comes around 1600-1700 dollars.

This is just a technical view 🙂 rest everyone may have their own strategy on gold.

 

For the traders i would suggest to be careful on short term longs. Below 1770 there could be much sharper correction in gold. One may even look for a short at 1880-1920 zone.

Lets have a look at the daily charts which shows 1770 is an important level.

 

GoldDaily

Time to be careful on short term longs on gold or keep a strict stoploss of 1770. If one were to compare Silver also touched 49-50 dollars twice before correcting sharply.

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Regards,

Nooresh

Article by Nooresh Merani

Nooresh has written 2613 articles.

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{ 4 comments… add one }
  • M K Munir September 13, 2011, 18:45

    I agree with your view. The last time this pattern was formed was around 1980. There was a fall after that.

    Reply
    • nooresh September 15, 2011, 10:22

      Hi Munir,

      Yes its all about when it cracks

      Reply
  • kamal sheth September 26, 2011, 12:28

    sir , your chart prediction in gold is geniuss .

    Reply
    • nooresh September 26, 2011, 19:03

      thanks,

      hope u made money of it

      Reply

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