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.

Equities are testing new high levels. Currencies are volatile, especially after the latest sharp movements on JPY, GBP and EUR. Gold is testing a major support level. Commodities are lagging… and Dr. Copper is telling us the other side of the story. A year-long symmetrical triangle is close to completion. Breakdown from this symmetrical triangle can trigger a sharp sell-off on copper price. What implications would that have on the overall market. We know that copper is a leading indicator of economic activity. How would the already volatile currencies react? Breakdown below 350 levels could send prices towards 320 levels.

EUR/USD reaches strong support area formed by the 50 & 200 day moving averages. 1.3050 is the level where 200 day moving average and the lower boundary of the upward trend channel meet. Since we have seen 50 & 200 day moving average crossover in December 2012, this is the first sharp pullback to the support zone formed by the two moving averages. If we see cross rate holding above 1.3050 levels in the following days we will put an intermediate term low and expect a rebound towards 1.33-1.35 area. Breakdown below the 200 day average will change the bullish outlook on this chart.

GOLD is likely to find support between $1,525 and $1,550. Year-long consolidation range has been intact between $1,525 and $1,800 levels. Latest sell-off in gold prices is not different that the earlier weaknesses precious metal experienced when the price reached the lower boundary of the medium-term consolidation range. Long-term trend analysis and the moving averages suggest $1,525 should act as strong support. Sideways consolidation between $1,525 and $1,800 is part of the long-term uptrend.

Here we have another soft commodity that is closer to its long-term support area. Similar to sugar, cocoa also peaked in the beginning of 2011 and since then prices have pulled back to test the lower boundary of the long-term trend channel at 2,050 levels. Finding support between 2,050 and 2,100 could help cocoa establish a new long-term uptrend. Current price action is similar to 2005-2006 base formation.