Gold Price: Downward correction appears to be underway

For the last couple of days gold has been testing a minor support range between 888 and 880.

There is not too much doubt that gold will in due time rise above its’ most recent high of 916. But meanwhile, a down ward correction to around 870-860 appears to be underway. Even a drop to around 845 would weaken the recent bullish action but would not likely prevent a rise to or above 916.

An unlikely close below 845 could indicate that the down trend has resumed.


Daily Gold chart as at 29 January 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
EMA20 – rising around 865
SMA 100 – flat around 810
Stochastic – down
MACD – still showing bullish energy

R1 – resistance at 916.
S1 – nearby support at 870.
S2 – 860.
S3 – 845.

****

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.