Precious Metals Report Card: Gold Futures Near Key Level

Wow, it seems like the daily news stream is almost overflowing. The Middle East conflict(s), crude oil prices, unemployment levels, manufacturing levels, a downward revision of Q1 2015 GDP, PMI, the Federal Reserve’s hint of a rate hike, etc. So how is all this affecting the price of Gold Futures?

Not only has Spring sprung but Gold Futures prices have sprung up a bit recently. Let’s go back and review our projections from previous articles that are listed below for reference:

Here’s an overview of the highlights from those research posts:

  • Gold Futures has a long-term target of 1033.4.
  • There has been continued weakness in the Goldman Sachs Precious Metals Index (GPX).
  • The 1179.4 level for Gold is significant.

Now, let’s take a look and see how Gold Futures are faring now. We’ll start with a very basic 5 year chart highlighting the downward channel.

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Gold Futures 5 Year Weekly chart

gold futures prices 5 year weekly chart

Let’s look at that same channel, only this time we’ll use a 20 year, monthly chart where the downward channel becomes even more obvious.

Gold Futures 20 Year Monthly chart

gold futures prices 20 year monthly chart

Drilling down to a 6 month daily chart yields investors more clues as to where gold prices may be headed. In the chart below, we can see opposing targets on the daily versus the weekly. Currently the daily target is 1227.7 and the weekly target is 1148.7 which was hit and provided support with a subsequent move up of 6.16% before a pullback to close at 1198.6 on Friday, March 27th, 2014. Using my Fibonacci method, a close at 1200.1 or higher would have created an upside weekly target.

It’s worthy to note that Friday’s close was only 0.70 above a level that would have created a new downside daily target.

Gold Futures 6 Month Daily chart

gold futures prices 6 month daily chart

Putting this all together, Gold prices made a low of 1130.4 on November 7th, 2014 and that level was recently tested. The critical support level of 1179.4 was breached on both occasions but has not been able to hold price under it. Now we’ll need to watch the fibs for shorter-term price movements.

However, at this time, I still maintain my longer term Gold Futures target of 1033.4.

Thanks for reading and remember to always use a stop loss order!

     Follow Dave on Twitter:  @TheFibDoctor

No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.