Thursday, 21 June 2012

Gold pulls back

Gold has been on our focus for some time now since the 1550$ level. The triple bottom and the possibility that a huge wave 4 triangle has ended made us believe that a rise in Gold was about to start. Since then, Gold has risen almost 90 dollars. As the move progressed, Gold found resistance at the upper pitchfork. Although it managed to briefly climb above that resistance, it never was able to move away from it. Yesterday it moved back in below the resistance line. Additionally it didn't manage to break recent high at 1642$. For the rise to continue, it was essential that 1642 was broken.

As can be seen in the intraday chart, the move is far from impulsive. However if we are at the beginning of a new upward move, this kind of overlapping moves can be explained as a couple of 1-2 waves. 1546$ is important for bulls to hold and for the rise to continue, gold must first break 1625 and then 1642. Bears could see the lows at 1528 being tested, but they don't want 1625 and 1642 to be broken upwards.

At this point I prefer neutral positions. I will try to enter long positions again either above 1625 or 1575-80. Stop would ultimately be the 1520-30 level.

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