|On October 28, 2008, and again on November 18, 2008, I made the case that gold was in a very favorable position to buy. At the time I said, "Prices would likely be around $850, if not higher" by the time gold reached the top of its trend channel. Since then, gold has reached a price of $857, thus almost reaching the top band of the trend channel.|
|FIGURE 1: XGLD, DAILY. Gold is channeling between the black lines.|
|Graphic provided by: Wealth-lab.|
|Based on this move, is now the time to sell? Yes, in my estimation now is a good time to take profits. First, and most important, gold has basically reached the top of the trend channel. Second, gold is at an important resistance level predicted by taking a Fibonacci price projection of 127.2% between the last leg's low and the last swing high, as shown in orange. Finally, both the daily and weekly stochastics are overbought. See Figure 1.|
|Gold could well have a bit more shine left, but a top of intermediate proportions is likely near.|
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