Brexit – Gold says no – Bull Trap

Brexit is coming, Gold on the other hand said “NO BREXIT” but instead has a BULL TRAP.

A fascinating shift in the market where physical gold is beginning to lead the futures market.  The demand for physical Gold has been increasing over the past few months, leading to support increasing as gold is reaching new highs.  The key is in the charts and we can see that there is a bull trap that was sprung recently off of the highs.  Let’s check the charts.

The Monthly gold chart shows the major down trend with a declining wedge.  The past 3 months have consolidated between 1210 and 1300.  This past week we saw price head to a new high at $1318 an ounce.  The past three months volume is staying pretty high and consistent.

We are presently below the 200 moving average in Red.  On a long term chart this is the key for bulls being in control and getting out of this bear trend.  The finish of this trend could occur around some Outlier. The BREXIT seemed like it could be the stimulus which would send us to these new highs and break through the monthly chart but did not pay off as price came $50 off the highs.

The weekly chart in Gold also sets up nicely with some tells.

Bull TRAP reveals itself in price failure over 1300 on reversal from high and increasing sell side volume.

Gold prices above $1300 an ounce were met with selling as price moved towards last weeks highs.  Buyers could not hold their ground as increased sellers moved price lower and then a move of $36 an ounce down into the pre Brexit vote coming tomorrow.  If this isn’t a bull trap, then we might see this resistance shattered and a move to 1363-65 area and a further move to 1385 then 1450 if there is a BREXIT.  As of now the buyers have lost their steam and we could see a test to previous swing lows at $1200.