GOLD ($/OUNCE)

After a 20 month-long sideways consolidation Gold is likely to find support at the strong support area between $1,525-$1,535. Since October 2012, prices have been moving lower as part of the sideways consolidation. Gold tested the support area for 4 times over the past 20 months.

On the long-term chart, decade-long uptrend had two major interruptions. First one was a sharp correction in 2008 that took gold price from 1,000 levels to 680 levels in less than 8 months. The second one is still ongoing. Unlike the first major correction, price is contained in a tight range between $1,800 and $1,525 levels. However, latest correction took longer than the previous one. Gold might be forming a major low at these levels as the long-term trend channel and the 100 & 150 week moving averages act as strong support. If this is a major low (will be clear in the following weeks by prices rebounding sharply) gold would resume its long-term uptrend towards 2,000 levels. If price breaks below 1,525 levels long-term positive outlook will be challenged.