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Gold – Medium/Long Term Forecast

As of 10.6.2011 – 7:30pm cst

Here is a look at a longer term Gold chart.  There are a lot of technical analysts calling this a potential impulse 5 wave move lower in progess, however, we do not believe that is likely at all.  The fundamentals should keep Gold well supported during this correction lower off of the parabolic top put in at 1923.  We are calling for further retracement lower in Gold to unfold primarily due to equity weakness that we expect will continue in the months ahead, but also more precisely the cause is USD strength that will persist in a much larger move higher.  We are considering the 1535 low put in on 9.26.2011 to be the completion of wave “a”.  For the near term price action is likely to move higher to carve out the “b” wave to about the 1730 price level.  Then the downward move should resume targeting about 1300 for the end of “c” and “(ii)”, which is the 50% retracement of the three year move higher.  From there we expect price aciton to base out and continue a longer term bullish move to much higher prices.

Gold Weekly Candle chart

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