Gold: Lowered stop to $1599, thereby locking in further profits. Gold has just breached its multi-month channel support and now targets key level at $1522 (29th Dec swing low). This area will decide Gold’s fate over the next coming weeks.
A sustained confirmation beneath here would reactivate the risk for a much larger decline that we have been anticipating. Keep in mind that our cycle analysis continues to highlight downside targets into $1460 and $1300.
This would likely trigger a temporary, but dramatic setback that would ultimately offer a unique tactical buying opportunity into the coming summer/autumn months of 2012.
The bulls need to hold above $1522 in order to put this scenario on hold and offer potential consolidation or recovery higher.