Gold price into correction likely, with downward bias

The rise in gold from a low of 681.50 on October 4/08 up to the present has some characteristics of a correction rather than the beginning of a strong new trend.

If this up move is a correction, the rise will probably be limited the resistance zone between 800-826.

If the market breaks the low at 681.50 before rising above 844., expect a drop to the S2 area between 656. and 646.


Gold chart as at 30 October 2008 using NextVIEW Advisor

R1 – 776.
R2 – a zone of resistance between 800-826.
S1 – nearby support at 681.50
S2- 656.646 (not shown on chart).

MACD – rising, following price.
EMA210 sloping downwards around R1, and creating some resistance to upward movement.

***
Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.