Gold near upper trend line

Weekly chart of the World Gold Index going back to 2002 with a trendline touching the major tops in the market.  2003, 2006, 2008 and now 2011.  Each time Gold has reached the upper trendline it has had a pullback. (Providing a buying opportunity)

Gold has been on a solid uptrend since the first week of July this year due to sovereign debt issues in Europe. What would bring the Gold price down with it entering the 'seasonal' period where the highest returns are typically seen?  Maybe a Comex margin increase?  Who really knows at this point other than the puppet masters at the Crimex.

Gold has penetrated the upper trend line only for a few days in the past and has come right back down.  The year to date return on Gold is around ~31.8%.  There is now a double top at the upper trend line which is providing major resistance. Trading sideways for a little while before another run past $1900 may be in the cards for Gold.  $2000 this year is a real possibility.

June 25th Gold

Daily chart of the World Gold Index from late January 2011. 

Going through the summer months in a sideways to lower trading range seems like the scenerio for 2011. Seasonals to control the precious metals markets............again. 
Gold did drop below the 50 day moving average. 

Next level of support is the 61.8 fibonacci level ($1475) that is based on the low in late January to the high produced in early May. 
100 day moving average at $1465
50% fibonacci retracement at $1442
200 day moving average and the 38.2 fibonacci retracement at $1410

With Greece, Spain and the other euro countries with hugh debt problems, the only way out is to continue to debase their fiat currency.  The commodity bull market is far from over, it's a waiting game...  The Comex will attempt to raise margin requirements when the PM (and other commodities) go parabolic, but they will not be able to overcome worldwide demand of the phyical market.

Continue to dollar cost average into both Gold and Silver.  Swing trade the miners from the August lows going into the seasonal bull run in Sept to November/December...

Technical analysis XGLD

Here is the chart of the World Gold Index (XGLD) since mid July with a closing price of $1245 on Sept 10st, 2010.    (Click on the chart for a larger view)

• Gold has made higher highs and higher lows since the July 28th low at 1155. Bullish
• The price is above the three moving averages of 15, 50 and 100. Bullish
• The 18 dma crossed over the 100 dma on 8/16/10. (Indicated with a white arrow) Bullish
• The 18 dma crossed over the 50 dma on  8/23/10.  (Indicated with a white arrow) Bullish
• The 15 day moving average is above the 50. The 50 day moving average is above the 100. Bullish 
• The MACD Histogram is above the center line and descending. Neutral/Bearish
• Stochastics K line crossed over the D line and is below the 80 level at 68. Bearish 

The price dropped below the 15 dma on Friday and moved up to close right on it for support.  If Gold continues to decline, there are a few areas of support, depending upon the indicator that is used.

1227.5 level as that was the previous high in Dec09.  
The last break low was at 1238.10 on Sept 3rd.
The 50 and 100 dma is at the 1212 level.
Bollinger band is at the 1216 level.

Gold has appreciated from the 1160 level in late July to the 1260 level in early Sept, about $100 in just over a month. We may experience some small correction which has been the 'norm' with the Gold price after a run up.  As mentioned before, every time Gold has pulled back since 2002, it has recovered and progressed to new highs.  I would expect the all time high of 1266.50 to be breached before the end of the year.