Gold: analysis for December 31, 2013 Trend News

Overview:

Since our last analysis, Gold has been trading downwards, as we expected, the price tested the level of 1,194.68 on low volume and that is the reason why we saw the small upward correction and the testing of 1,206.13.We can observe that supply on high volume has entered the market at 1,206.00, so the level of 1,206.00 may be the point for further bearish continuation.We can also see decreasing volume on upper legs which is good sign for further bearish continuation.We may see testing of previous swing lows at the price of 1,192.00 and 1,187.00.Do not forget, Gold is in the bearish trend so buying looks very risky. Watch for selling opportunities.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,209.31

R2: 1,213.75

R3: 1,220.93

Support levels:

S1: 1,194.95

S2: 1,190.51

S3: 1,183.33

Trading recommendation: Trading the metal, be careful with short-term buying and look for selling opportunities.

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#USDX Analysis for December 31, 2013 Trend News

The Dollar index is still trading within price limits that do not show a clear trend path. So we neither prefer bullish or bearish setups. We are not bullish or bearish. We prefer to remain neutral as the price action in the Dollar index due to holiday season remains low and volatility is expected to remain low.

Price action remains overlapping and there is no clear sign of a direction in this market. Although the longer term trend favors bearish positions as prices continue to make lower lows and lower highs, we prefer to remain neutral. Short term support is found at 79.70 and short term resistance is found at 80.40. We prefer to think of opening a new position only if prices break an important resistance or support.

The daily chart remains complicated with no real directional signal. We remain neutral.

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Gold analysis for December 31, 2013 Trend News

Gold prices as expected by our analysis have not managed to move above the downward sloping channel resistance levels at $1,220 and reversed down. Prices have broken below the short-term pivot area of $1,205 and are now testing the first important support level at $1,1195. We continue to prefer the wave scenario shown in the chart below.

The alternative preferred wave scenario implies that we are making a couple of 1-2 waves down. This scenario implies even more downside potential. We should not forget we are currently in the final stages of the downward move from $1,360. However, there is an opportunity to open short positions to take profit of the potential decline towards $1,140-$1,150, we anticipate.

The daily chart continues to show that the trend is downward. Prices continue to trade within the long-term downward channel. We remain bearish. The target is $1,140-$1,150.

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