Softening of gold prices from the “stronger” dollar is being offset by demand for gold as a safe haven from the looming euro-zone crisis. Respect of support at 1750 would indicate another test of $1900; confirmed if spot recovers above $1830. The pattern remains bullish at present, but breakout below $1750 would warn of a double top and correction to $1500/$1600* (depending on whether you take the base as $1700 or $1750).
* Target calculation: 1900 + (1900 – 1750 ) = 2050 and 1750 – (1900 – 1750 ) = 1600
Gold miners such as AMEX Gold Bugs Index ($HUI) continue to test support after their recent breakout. Failure of support at 600 would warn of a bull trap and weaker spot prices.
* Target calculation: 600 + ( 600 – 500 ) = 700
i know your comments have very good merit now. your comments abouut the bear market have helped me.
Gold, in my opinion, has been going up based upon mostly on expectation of high inflation (as a result of the mass money printing by the Fed). When the Fed didn’t announce QE3 (as was widely expected), the psychological bubble popped. That doesn’t mean that after a significant correction (probably down to the 1440 range – a 38.2% correction), that it won’t be ready for another major leg of advance (after all, the high inflation era is still looming out there just over the horizon). The double top I mentioned in a previous comment is real. Gold is in a corrective phase, but long term it is still going to be the place to be.
The double top has completed and we should now see a correction. Break below $1700/ounce would confirm. As for QE — I suspect it is not a case of IF but WHEN.
maybe the reason for the correction is not a lack of support, but investors selling under duress. I do think that Gold will bubble, but the prick to break it is a long way off in my opinion. But when it does come it will be a big quick burst