Gold: Upside possible, correction expected in the next few days

On October 3rd, gold spiked down to 817.50, marginally below my forecast support area of 821.

It has now reached the predicted resistance area at the top of the three week old trading range, at close to 926. A consolidation period is due before gold moves dramatically to the upside to test the July 15th high of 988.50.

A quick break to the upside is not ruled out, but two or more days of correction is likely to occur before the uptrend resumes.


Gold Futures chart as at 9 October 2008 using NextVIEW Advisor

R1 – resistance at 926.
R2 – 988.50
S1- 883.
S2-858.

Moving Average – 100MA – provided intraday resistance to the up move, but was convincingly exceeded to the upside on October 7th, and may now provide some support to a down side correction.

MACD – in positive territory and rising

Article and Commentary by Don Schellenberg