If ever an up-trending market is without a health restoring correction process, investors seemingly have leaned too far to the side of one bias. Generally the result is an 'approaching top'. This might be the case now since Gold is contained within a sideways structure; a pattern that represents indecision and lack of direction. But under different circumstances, particular price behavior of this kind can presage a grimmer outcome.
The extended condition of Gold has a trajectory that speaks to more bearish possibilities, and not the bullish 'hype' that currently orbits our trading universe. Since these patterns are tricky, one cannot be certain of which direction prices will break-so key will be to follow the dollar.
If the dollar breaks its previous swing low, then gold will likely stage a mild advance to the neighborhood of 1815, 1840 max. Anything past that will be given back rather sharply as the metal is 'overdue' for a more substantial correction.
Should Gold break down from this 'up and down' pattern, then the initiation of a 2 to 3 week corrective phase has begun. I would anticipate the preliminary stage of the move lower to be a quick drop that is followed by a sideways consolidation. Thereafter the metal price will stage an upward advance of much greater magnitude than this current one, likely pressing the September of 2011 highs at roughly $2,000 an ounce.
Traders/investors who 'missed out' on the August/September multi-month advance that are looking to reposition for what I believe is going to be an extremely lucrative opportunity- an subscribe to the premium newletter. In it outlines a detail description of both the sequence of events and particular points of entry.
