Gold Bull Market Over?

By: Mike_Paulenoff

While today's $45 plunge in spot gold has violated the monthly low at $1612.47 and pressed the price structure to a new 9-week reaction low at $1595.32, let's notice that the pattern emerging from the very big picture continues to carve out a massive high-level congestion area in the form of a large triangle that is perched atop a 12-year bull run.

At this juncture, based on the monthly chart, spot gold first must compromise the integrity of the lower triangle support line, now in the vicinity of $1557, and then plunge beneath the December 2011 low at $1522.48 to morph the triangle continuation pattern into a multi-month top pattern.

Barring the extension of acute weakness, and notwithstanding today's weakness and the damage inflicted to the nearer term technical set-up, for the time being it remains premature to declare the bull market in gold and the SPDR Gold Shares (GLD) to be dead and buried.

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By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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