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Gold - A Brand New Day, A Brand New Look...Bad and Good...

The price action in HUI is pointing to more imminent downside where my previous call for a possible RH&S formation is just being invalidated...

  1. The uptrend support line from 2000 (monthly chart) is firmly broken now & there is no way to draw another uptrend line for now...
  2. However, Fibonacci retracement is pointing to 270s as the next strong support area
  3. Bear in mind that, the bull may still be alive if it can be ultimately supported at 61.8% retracement level
  4. But, for now, stay clear of the miners and brace for more downside bias!

HUI Index
Larger Image

Similarly for gold, it is looking to trade a lot lower given the odds of miners pricing in and leading a lower gold prices in coming weeks...

  1. As such, it is warranted to redraw the major trend line for gold where Fibonacci 38.2% level is seen as the major support in coming weeks
  2. Given the steepness of gold price trendline since 2008, a better trend-line with a sustained gradient lies all the way back to 2000
  3. If we still use 2008's low as a connecting point, Fibonnacci 38.2% level offers a solid support around USD 1,300 level.
  4. I believe further selling should stop at this level if the bull is still alive!
  5. For now, long the physical on dip...

Gold Chart
Larger Image

 

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