Gold looks set to advance anew from here. It has been in corrective mode for
a week now following its approximately $15 run-up earlier in the month. This
measured reaction of the past week has allowed the developing overbought condition
to ease and the moving averages to swing into more bullish alignment. The action
of the past week has also synchronized with a weak pullback rally by the dollar
towards the neckline of the Head-and-Shoulders formation that has developed
over the past 10 weeks or so. It is thus considered likely that gold will advance
in coming weeks to test the December highs in the $456 area.
There is plenty of support for gold between the current price and the $430
area, especially with the rising moving averages not far beneath. This was
evidenced by the positive action Friday when, although the price dipped back
into support, it closed near the day's high - thus downside is regarded as
limited here.
The above represents the opinion and analysis of Mr. Maund,
based on data available to him, at the time of writing. Mr. Maunds opinions
are his own, and are not a recommendation or an offer to buy or sell securities.
No responsibility can be accepted for losses that may result as a consequence
of trading on the basis of this analysis.
Mr. Maund is an independent analyst who receives no compensation
of any kind from any groups, individuals or corporations mentioned in his reports.
As trading and investing in any financial markets may involve serious risk
of loss, Mr. Maund recommends that you consult with a qualified investment
advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction
and do your own due diligence and research when making any kind of a transaction
with financial ramifications.
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