Gold Suffers Near-Term Chart Damage

august2011_comex_goldAugust Comex gold futures prices Monday morning hit a fresh five-week low of $1,491.70 an ounce. The gold market is tentative to start the trading week, as Greece’s parliament is scheduled to vote later this week on fiscal and austerity programs, amid the European Union debt saga that continues to play out and which continues to impact many markets, including gold. Some near-term chart damage has been inflicted in gold following Friday’s bearish weekly low close. Recent price action has also seen August gold drop below what was major psychological support at $1,500.00 an ounce. Indeed, the bulls have faded and need to show fresh power soon to avoid more serious near-term chart damage. Importantly, gold bulls still have the overall longer-term technical advantage.
Prices are still in a 10-year-old uptrend on the longer-term charts. However, the shorter-term uptrend on the daily chart for August gold futures has at least temporarily been negated. Gold bulls’ next near-term upside technical objective is to produce a close in August futures above strong technical resistance at $1,530.00. Bears’ next near-term downside price objective is closing prices below solid technical support at the May low of $1,464.10. First resistance for August gold is seen at Monday’s high of $1,506.10 and then at $1,511.40. First support is seen at Monday’s low of $1,491.70 and then at $1,485.00. Stay tuned!

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