Gold: Green Signals for Bulls – Trend is about to change

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For past couple of weeks Gold has turned to bearish after establishing a six-month high at 1392 approx on 17-Mar and started his downfall. A major factor that pushed this yellow metal through technical level was Fed chairman Yellen’s comments on 19th of March 2014.
Gold continued moving lower and reached 1285 level but did not breach this level as its getting a strong support from trendline. Also, by applying the Fibonacci retracement tool the 1285 matches with the 50% retracement level and Gold has retraced from here. Although a strong reversal signal seen on Gold’s Daily chart which is a “Bullish Harami” candle, it is a bullish reversal candlestick pattern which is moderately reliable and tell us that the trend is about to change. By following the trends the 50-period moving average crossed above the 200-period moving average and this is an additional negative indication which called “Golden Crossover.” However, the RSI (5) is giving us oversold signal and it is below 30 territory and buying opportunity of Gold and It indicates the Red light for bears.


Gold Daily Chart








P.S. On above gold daily chart I have used 5-period RSI instead of 14-period RSI because the shorter timeframe makes it more sensitive and it generates more signals.

Bullish Harami candle on Gold’s Daily chart


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