Thursday, May 5, 2011

Gold Correction Update II

In the chart above, GLD, the ETF for gold, briefly penetrated its trend line only to fall back below. I had given my reasons for predicting this behavior here. This brief penetration often happens in the terminal stages of an uptrend. This price structure therefore suggests that gold will correct.

As the anticipated correction develops, more clues will be given towards the area in which the correction will end. Tentatively, one possible target is the 50 week moving average, which is about 130 on GLD.

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