Calling a top is difficult, especially in a raging bull move such as we have seen, but there is something to be said for discipline in this game; the spot 2335 target I suggested at the beginning of March has been exceeded by 30$.
- Bullish sentiment in the metals sector is fervent
- Momentum indicators on weekly and daily timeframes are stretched
- Gold is far above ( historically) its 200-week moving average
Last week, I noted that I would be looking at momentum and price for signs that a top may be near. In my opinion, the move in metals is due for an imminent correction, and it may be a harsh one. The below daily and weekly gold charts illustrate the above points as well as present some potential downside targets. Note that potential downside targets remain above key breakout points, with the exception of the closest, light trendline, which has a higher probability of acting as only minor support.
Daily:
Weekly:
Platinum is trading at an all-time low vs. gold and very close to its all-time low vs. silver, as well. Perhaps traders or investors would consider swapping some gold for platinum?
Some preparation for defensive action is a good idea as evidence begins to mount that gold and silver may be at or approaching a temporary top.
Thanks, and good luck.
