Gold Fever – as in "illness". Gold's bear market has been slow to get started. Rather it has played out as a consolidation since last June. But gold is now testing important support and despite bullish seasonality in September, we expect a breakdown in the metal to be forthcoming.
Gold fell $24.30/oz. last week and closed at $1,305.80 on the 89-dma and the December bull trendline. Resistance is at 1,365 (38.2% retracement of the 2011 bear market) and support is near 1,295.
Gold has triggered a triangle on the daily chart. It measures a minimum decline to 1,280.
The weekly Coppock failed to confirm the recent high supporting expectations of an important top. An impulsive five waves down from 2011 tells us the decline was wave A which is followed by an upward correcting wave B and, finally, a decline to (at least) last year's lows with wave C.
Cycles: An important annual low is due in late Oct. but a monthly low is expected near September 20.
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