XGLD Oct 11, 2010

World Gold Index, October 11, 2010. 9:55 pst.

The World Gold Index is hovering around the $1344 an ounce level on Monday, Oct 11th, 2010. Last week, it reached a all time high of $1364.60 an ounce.

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.

The next price peak based on the fibonacci retracement at the 161.8 area is around the $1563 level on a longer term basis. The points taken to derive this number is taken from October 2008 lows to the December 2009 high. When will this occur? Will it occur? If the US Government continues it's quantitative easing (Printing money), the next level should be realized. When?

Weekly chart of World Gold Index

Based on the trend line drawn on the weekly chart, it suggests that the World Gold Index _may_ hit the 1563 level next year around the April time frame.