Reverse Expected in Spot Gold
By Mike Paulenoff, www.MPTrader.com
My near and intermediate-term work is warning me that 3 session climbs from $850 to $911 (so far) in spot gold will turn out to be a trap (bull trap) and part of a near-term topping process just above $900, prior to another bout of corrective weakness that presses prices into the $800-$770 area in the weeks ahead. The upleg pattern off of the August 2007 low at $641.00 to the January 14th high at $914.00 exhibits the look of completion. In addition, the heretofore reliable 15-18 week cycle (low to low) is now in its 8th week. I expect a price peak in the 8th or 9th week of a 15-week cycle, so this retest of the highs is occurring "on schedule." If my work proves correct, then spot gold prices -- along with its ETF, the streetTRACKS Gold Shares (NYSE: GLD) -- will reverse in the upcoming hours, and press towards a retest of $850 initially. What about the weakening dollar as a catalyst for much higher gold? My work on the euro argues that it is forming a top as well, with a lid at 1.5000.