Gold Continues to Exhibit a "Friendly" Technical Set-Up

Spot Gold is setting up a very interesting "battle."

My preferred pattern scenario argues that the June low at $1180.04 ended the major correction from the Sept 2011 high at $1921.50.

The June-Aug rally from $1180.04 to $1434.05 represents the first completed upmove of a larger, and still developing intermediate-term recovery-rally period.

The decline from the Aug high to the Sept 17 low at $1292.51 ended an intervening pullback ahead of the initiation of the second phase of the intermediate-term recovery period.

All of the action since Sept 17 represents the preparation bottoming work required prior to upside acceleration that should hurdle the post-no taper high on Sept 19 at $1375.37, on the way to a test of the Aug high at $1434.05.

At this juncture, only a decline that breaks both last evening's low at $1313.76 and the Sept 17 low at $1292.51 will invalidate my current outlook.