Following earlier 2010 gains in Gold, the pullback in June has proved a short-lived affair, with a fresh upleg from late July having now led to new 2010, and all-time, highs. A current chart pattern calls for a degree of caution, but we must still consider higher targets.

The Commodity Specialist view

WEEKLY CONTINUATION CHART:

The structure of the whole recovery from 2008 low may still be seen as a type of 5-wave/ impulsive structure, but more important right now is the current wedge-type pattern.

These can be reversal formations, but sometimes are the precursor to acceleration higher, in which case note the next Fibo projection on this chart, at 1375.

Only a reversal through the pattern base and then Jul low (see Daily chart) would provide a clear bear sign.

DAILY CHART DEC-10:

We also show the wedge pattern here, with initial upside break from this.

We now look to higher levels such as a Fibo projection at 1340, which lies just below a bull channel top projection currently.

First support comes from the 1270.60 Jun high, although most important at this stage is the wedge base around 1200.

Mark Sturdy
John Lewis

Seven Days Ahead
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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