Gold: Look For More Supply To Hit Metals Markets Next Week

Gold was trading last at $1,557.70, up about $7.30. The Variable Changing Price Momentum Indicator (VC PMI) average daily price is $1,552. The Sell 1 level above the mean is $1,556, and the Sell 2 level is $1,562. The Buy 1 level below the mean is $1,546 and the Buy 2 level is $1,542.

The market ran up above the average price overnight and activated a bullish price momentum target. The target of $1,556 was completed. The market is trading above that Sell 1 level of $1,556 and has activated the target of $1,562. The VC PMI artificial intelligence calls this area between the Buy 1 of $1,556 to $1,562 an area of distribution of supply. We are neutral on the futures side and we are looking for a signal to be activated on a close below $1,556 using the 15-minute bar, or if the market runs up again and activates the Sell 2 level of $1,562, and closes below. We have no positions here in gold. We took profits yesterday on the Direxion Daily Gold Miners Index Bull 3x Shares ETF (NYSE:NUGT) as the market rallied into the weekly mean of $32.76.

We are in a hedge position with the Direxion Daily Gold Miners Index Bear 3x Shares ETF (NYSE:DUST), expecting the gold market to experience more supply at these levels. We should run into more supply as the weekly mean of $1,572 comes into play. Right above $1,562, we have $1,572, which is the weekly mean. The previous high is $1,564, so I would say, if I was looking to go long using the VC PMI, I would wait for the market to close above the $1,572 weekly mean and activate a bullish price momentum. We appear to have a ceiling of supply to deal with. The weekly signal, by trading below the weekly average of $1,572, is bearish. It has activated the target of $1,530 on the weekly basis.

The daily numbers are in an area of distribution of supply between Sell 1 of $1,556 to $1,562. We have no position on the day trade unless we close below $1,556 or test $1,562 and close below it. The weekly signal is short or has a bearish price momentum with a target of $1,530. This signal would be negated on a close above $1,572.

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Disclosure: I am/we are long DUST.

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