May 24, 2010
Gold Recovering after Six-Day Setback
June Gold is trading higher this morning after high volatility and overbought conditions drove large speculators to take profits. For several weeks, gold traders had been
buying the metal as a hedge against the possible collapse in the Euro, but the recent slowdown in the fall in the Euro gave speculators an opportunity to take a little bit off the table.
Last night’s renewed weakness in the Euro and concerns about contagion in the Euro Zone because of the government takeover of a Spanish financial institution is helping
to drive up gold this morning.
Technically, June Gold is still in an uptrend as long as the last swing bottom at $1156.20 holds as support. Last week this market corrected into a 50% price at $1167.90
and an uptrending Gann angle at $1168.10. This morning the Gann angle moves up to $1170.10.
Based on the developing short-term range of $1249.70 to $1166.00, traders should look for a minimum near-term correction back to $1207.80 to $1217.70. …
