Gold Pulls Back......A Safe Fibonacci Retracement For The Bulls?

The gold market has now pulled back to the $1,781.49 area, which is a 61.8% Fibonacci retracement. The gold market is now in an oversold condition and we expect to see this market have a balance in the next day or two.

With both our long term and our intermediate term Triangles positive, we expect the longer term trend to once again resume to the upside. With a Chart Analysis Score of + 55 it would appear that the gold market is in a near term trading range. Providing that our monthly and weekly Trade Triangles remain intact, we want to approach this market from the long side. The Williams % R is in an oversold condition.

The $1,850 level is resistance for gold, at the moment. Support comes in around the $1,780 and extends all the way down to $1,750. Looking at the market, it would appear as though we may have put in a double top. This will only be confirmed with a close below the $1,750 level. Intermediate and long term traders should maintain long positions with the appropriate money management stops in place.

Gold closed sharply lower on Thursday and below last Wednesday's low crossing at 1793.80 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Friday.

Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. If December extends this month's decline, the reaction low crossing at 1705.40 is the next downside target. If October renews this year's rally into uncharted territory, upside target are hard to project.

First resistance is last Tuesday's high crossing at 1920.70. First support is today's low crossing at 1775.00. Second support is the reaction low crossing at 1705.40.

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