Gold On A Run Update: Time For A Rest?

It seems like gold is on a marathon run, hardly taking a breather. No trend lasts forever, even at these small degree intraday levels. This rally changed from bigger wave corrections to smaller corrections that we can hardly count out.  This has the classic diagonal wave structure signature, so until better subdivisions come along, this will have to work as an inverted zigzag.

It could be a slow correction or a mini flash crash like move, with no real firm retracement level in sight. Even though it looks like a vertical move on the daily scale, in this intraday scale it has a bit more of an angle to it.

We are coming up to a potential H&S setup so this may add some resistance as well.  We’ve seen these types of H&S setups many times before, with most of them ending up being extremely bullish.  I don’t expect, this time to be any different.

This gold rally got help from the US dollar decline, causing stupid emotional investors to jump on the bandwagon.  Many investors only care that something keeps going up, as they couldn’t care less about any fundamentals. Without those trend chasers, contrarians have nobody to pick on, or no gold bulls to sell to in the future.

The big bull market in gold is still in progress, and it could take all of next year before it becomes more clear to a greater majority. That day has not arrived, even though gold is pointing up, like what we would see in a final blow-off situation.

The main price level of $1375 still has to get retraced in the short term, while longer term the Gold/Gold-stock ratios, will need to shift to the expensive side.

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