Gold Bulls Coming Back For More

The Commodity Specialist view - Following earlier 2010 gains in Gold, the pullback in June has proved a short-lived affair, with a fresh upleg from late July having now led to new 2010, and all-time, highs. A current chart pattern calls for a degree of caution, but we must still consider higher targets.

• WEEKLY CONTINUATION CHART: The structure of the whole recovery from 2008 low may still be seen as a type of 5-wave/ impulsive structure, but more important right now is the current wedge-type pattern. These can be reversal formations, but sometimes are the precursor to acceleration higher, in which case note the next Fibo projection on this chart, at 1375. Only a reversal through the pattern base and then Jul low (see Daily chart) would provide a clear bear sign.
• DAILY CHART DEC-10: We also show the wedge pattern here, with initial upside break from this. We now look to higher levels such as a Fibo projection at 1340, which lies just below a bull channel top projection currently. First support comes from the 1270.60 Jun high, although most important at this stage is the wedge base around 1200.

[For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]