Heading into the final session of July, let's have a look at the very big picture of spot gold, which shows that the price structure has gyrated into the nose of a year-long coil pattern, which is positioned in the top 30% of the entire bull phase from the August 1999 low through the May 2006 high.

The fact that prices have woven into a tight range between $690 and $640 within the larger coil is a potentially bullish sign for traders of gold, including the streetTRACKS Gold Shares (NYSE: GLD). As far as I am concerned, as long as spot gold prices remain above the rising 1-year MA (now at 626.72), my optimal scenario will call for a thrust out of the coil into a new upleg that climbs above the May 2006 high of $731.25 -- to a measured target of $767 derived off the 1982-2005 base pattern.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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