Sunday, January 9, 2011

Gold Jan 7th

Gold is still in the trading range between 1315 in early Oct to the high of 1432 in early December. Gold has had a good run during the fall and is in a typical consolidation period before the next move, for the bulls, a move to the upside.
How low can this pullback go? 
The last break low was 1361 which was pierced, but closed a little higher at 1368. The lower bollinger band is just under this level.
The next support is at the 100 day moving average at 1337.
The next low is at 1331 which was in November.
The October low was at 1315 which is only $110 under the all time high.  Gold can move +50 in one day, so it can recover very quickly. With countries like China, India and Russia purchasing as much Gold as they can get, I will assume that this correction will not last long. We may see a bottom this coming week and a possible rise near the end of the week if not sooner.  If it does break lower, a potential buying opportunity for those on the sideline will be presented in both physical and mining shares.

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