|World Gold Index, October 11, 2010. 9:55 pst.|
Gold has been trading inverse to the US Dollar Index over the last 2 months or so. If we continue to see the dollar weakness, Gold may continue to rise in price. (As you know, nothing is for certain in financial markets. Gold does not always trade inversely to the dollar).
Most markets consolidate after a run-up which is what may happen. A small fast correction may also be realized before a run-up towards the $1400 level before the end of November.
If a pullback is going to happen, what level will Gold drop to? Where is the support? You can find it at the moving averages of the 50 day and 100 day. A key level is going to be the even number of $1300. A fibonacci retracement of the recent run-up has the 61.8% retracement at $1285.
|Fibonacci retracement of the run-up from July 28 to Oct 7th.|
|Weekly chart of World Gold Index|