Has gold seen its 2009 high?
THERE are times when it is difficult to see the rhythm of a market. At other times, the market's heartbeat is unmissable.
From a $681 low, gold advanced to $833. This was a $152 move in 21 days. Then it pulled back and rallied from $741 to $893. This was a $152 move in 18 days.
The third advance was from $801 to $954. This was again a $152 move in 18 days. So we have three advances equal in magnitude and equal in time! This is indicated in red on the chart.
During these advances within the channel, we had three lows and three highs. The lows were at $681, $741 and $801. It is striking that these lows are all $60 apart. The three highs were at $833, $893 and $954, also $60 apart. This is also indicated on the chart.
If this does not strike you as fascinating (or at least interesting) you must be totally tone deaf! This is the rhythm gold dances to.
How should we interpret this?
Considering the fact that gold is at significant resistance and that both price and time formations peaked on Thursday 12 February, we can assign a high probability case that we have likely seen the high for the year in gold. Falling below $870 should confirm that significant downside is to follow towards our $700 and then $600 targets.
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