Price of Gold anticipated to pause briefly

Two weeks ago I announced that if the market had sufficient strength and momentum to breach R1 (950-960) convincingly, R2 (976) would be the next logical upside target. That target was surpassed and there is now a three month high at 990.

Price is currently at 969.50. I anticipate that gold will pause briefly with sideways activity before a testing the February 20th, 2009, high of 1006. and the March 17th, 2008 high of 1032.50.

A downside break below 930. would force a reconsideration of this outlook.


Daily Gold chart as at 4 June 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
MACD – in positive territory with weakening momentum
Stochastic – dropping down from it’s overbought level.
Li’s Sandwich – the top line indicates potential resistance, and the bottom line indicates potential support.
R1 – immediate resistance at 990.
R2 – 2006
S1 – a zone of support from 946-930.
S2 – 912.

****

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.