A Shorter Term Target in Gold
10 September 2009
A recent, initial bull break in Gold price has been much trumpeted (the 2008 peak has yet to be breached, note). Keeping excitement tempered we currently focus on a shorter term bull target, whilst also keeping in mind what is required for the bull picture to go awry.
WEEKLY CHART - CONTINUATION:
The recovery from just above the 76.4% level of the 2006/2008 upmove initially stopped short of the 1014.60 2008 peak.
This now looks vulnerable, but the test then is whether price can hold above here.
DAILY CHART – DEC-09:
In the Commodity Trading Guide we had previously said that the multi-month triangular pattern implied that the market was building up for a directional move.
The close above the 993.60 03-Jun high was a s/term bull signal.
If this is the start of a medium term upmove then there is time enough to suggest appropriate targets – meanwhile we keep an eye on the shorter term resistance area of 1031/40 (‘869.50/993.60’ equality target extended off 907.60 low, a Fibo projection, and bull channel top projection). S/term resistance would not surprise here. The falling return line (old triangle top) and 972.70 04-Aug high offer first support, but a close below the 950 area is needed to cast serious doubt on this bull signal.
Speculative dip buyers may favour the 975 area, stops around 945, targeting 1025 for partial profits and raising stops to cost to improve risk/reward.
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