The Commodity Specialist view – In our last Gold Update we had noted that there was a weakness creeping into the chart structures that put us on the alert for a bear attack. Latest developments have confirmed our suspicions.
- WEEKLY CONTINUATION CHART:
For some weeks we have been noting in the Commodity Specialist Guide that the whole recovery from 2008 low looked like a type of 5-wave/ impulsive structure, a third/final upleg presumed commencing from the 1045.20 Feb low.
Our latest Fibo projection had been reached, and the subsequent slip back has now given a further bear signal on the Daily chart.
Here, keep in mind the 23.6% pullback level, at 1127. - DAILY CHART – AUG-10:
After earlier failure to hold onto higher levels above the previous 1230.70 peak, latest weakness has, after recent violations of small channel base support and 38.2% retracement, breached the 1170 support area.
This provides a bear signal, now favouring sellers on rallies.
The fact that the Feb/Jun chart structure was similar to that on the Weekly chart (impulsive, but could have run its course) served as a bearish warning too.
Now, the first downside target is the 1133 61.8% pullback, which nicely coincides with 23.6% on that Weekly chart.
Perhaps more important from the point of view of medium term momentum is the lower support implied by the bull channel base projection at 1080.00 currently.
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