Sunday, February 5, 2012

Short term Gold action - Retrace to breakout?

A little over a week ago I pointed out Gold had broken out of it's downtrend. The heavier selling and large price drop on Friday suggests a short term top might be in (after a very strong move over the past 5 weeks from $1520 to $1760). 

Gold has a habit of retracing to test breakouts, so a dip back to around US$1680 seems likely short term (perhaps even trade below this level for a short period to clear out some stops before reversing and heading higher). If it drops below the breakout then there's still the 50 and 200 Daily Moving Averages to provide support.

CLICK IMAGE TO ENLARGE


BB.

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