$1180 is gold bulls’ best friend and bears’ worst enemy

Choose your side wisely in this fight

If it is not clear to gold investors and traders by now, $1180 is a KEY level for TWO reasons:

  1. It is a well-tested level that has been crossed or touched at 5 points minimum on this weekly chart.
  2. It is also a multiple-year level that becomes more significant the longer it defies sellers.
XAUUSD weekly chart clearly shows significance of $1180 as key level

XAUUSD weekly chart clearly shows significance of $1180 as key level

Gold price can still cross below $1180. It did so twice and most recently stayed below for nearly 3 weeks. If you look at this week’s price action on the daily chart below, I think that price action yesterday and the day before is loud and clear evidence the stopping power of $1180.

XAUUSD daily chart shows supporting power of $1180 just yesterday and the day before
XAUUSD daily chart shows supporting power of $1180 just yesterday and the day before

 

17 May 2013 prediction come true

Looking back, I think this chart posted back in May 2013 to the Gold silver bugs community on Google+ is priceless. Link to full-sized chart here.

My posting on G+

XAUUSD predicted at $1180 in May 2013

 

Salient points that gold traders and investors should know

I have written about the strength of support level of $1180 numerous times (readers can follow the links at the bottom of this post) but here is a list of salient points to take note of:

  1. The big picture trend for XAUUSD is still down. It made new yearly lows in 2013 and 2014 and until price makes a significant change this year, trend remains intact.
  2. Trend line studies in my first chart on top agrees that it is down trend. Trend line studies have a big following so I think that it is still a necessary addition.
  3. $1180 could be the beginning of a reversal because reversals have to start somewhere and that somewhere involves the discovery of a support price.
  4. A bullish reversal process could take some time since trends take time to change.
  5. As long as price trades above $1180, bulls have a base to take it higher. For bears to succeed at all, $1180 has to be penetrated decisively.
Trends take time to change

Trends take time to change

 

Links

03 December 2014 – ‘Gold’s price action in 3 time frames and 2 strategies forward
10 December 2014 – ‘4-month down trend in gold price XAUUSD over; potential bottom setup
12 January 2015 – ‘There is something bullish about Gold

 

 

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005. Soh Tiong Hum is a member and regular speaker at Technical Analysts Society Singapore events and has a bi-monthly lunch time event at IG Singapore on forex and stock markets. He is an avid blogger on technical analysis topics; his Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX. Come find Tiong Hum on Google+
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