January 14, 2012
Technical observations of RossClark@shaw.ca
Gold continues to remain boxed into a wide trading range with the low of December 29th versus 15th producing an “isolated low” as seen at both the July 2010 and 2011 bottoms. It was also the best oversold weekly reading in eleven months. The subsequent rally has reached its minimum targeted range of $1650 to $1670 for this bounce with $1720 still possible. Our time windows for interim highs are January 17th to 20th and then the end of February.
As we’ve pointed out for the past few months, this consolidation can resolve in a number of ways. When comparing the rally from $253 in 2001 there are four direct fractal correlations of interest. The following charts display the most recent parts of the patterns.
The bottom line is that:
1. in order for the intermediate trend to remain bullish the corrections of the next few weeks cannot give up more that 62% of the rally from $1523 (key support = $1577).
2. if the resistance line from August 23rd is taken out there is a strong likelihood that prices will test the all-time highs by the end of February. There is an outside possibility that $2155 can be achieved.
(Rest of article plus chartwork linked below)