Gold's fall resumed after recovery was limited at 1126.4 and has finally broke through 1075 support and reached as low as 1044.5 last week. Initial bias remains on the downside this week and further decline should be seen. Break of 100% projection of 1163 to 1074.4 from 1126.4 at 1037.8 next will target 1000 psychological level next. On the upside, above 1070.0 minor resistance will turn intraday bias neutral and bring consolidations. But recovery should be limited below 1126.4 resistance and bring fall resumption.
In the bigger picture, gold has made a medium term top at 1227.5 and correction from there is likely still in progress to 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level. However, we'd expect such correction to be contained there at around 1000 psychological level and bring resumption of the whole up trend from 2008 low of 681. A break above 1126.4 resistance will indicate that such correction has completed and will turn outlook bullish for another high above 1227.5. However, note that sustained trading below 1000 will dampen our view and put 931.3 key structural support into focus.
In the long term picture, rise from 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.....Comex Gold Continuous Contract 4 Hours Chart.
The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010
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