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by James Kupfer
Gold seems to have upside potential left, but how far will it go?
Position: Buy
James Kupfer
Mr. Kupfer is a market professional and amateur stock market commentator. Disclosure: It is likely that Mr. Kupfer has or will enter a position in any security he writes about.
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FIBONACCI
Gold Still Shining, But For How Much Longer?
03/01/12 02:09:24 PMby James Kupfer
Gold seems to have upside potential left, but how far will it go?
Position: Buy
| At the very end of January, I suggested that gold was due for a temporary pullback before it would likely resume its upward move. On February 3, gold reached an intraday high of almost 1766, which was points above the resistance levels I had indicated and points below the Fibonacci level shown on Figure 1. |
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| FIGURE 1: XGLD, DAILY |
| Graphic provided by: Wealth-Lab. |
| |
| As you can see in Figure 2, gold retreated the bare minimum 23.6%. It touched the 1709 level twice on an intraday basis over the following weeks and has subsequently moved higher. So where will gold go now? |
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| FIGURE 2: XGLD, DAILY |
| Graphic provided by: Wealth-Lab. |
| |
| Having moved above its previous resistance point at 1766, that level now becomes support for gold. In addition, that gold only retraced a very minor amount is a testament to its underlying strength. On the flip side, I would actually have found it more comforting had gold retraced further to the 1765 level to build more of a base and support the continuation of a move up. |
| That said, the 1778 level seems to be a reasonable buying point with a stop around 1765. The expectation would be a continuation of the move upward to a minimum price target of 1823. The 1836 level is more significant and would present a much more difficult target to exceed should it be reached. See Figure 3. |
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| FIGURE 3: XGLD, DAILY |
| Graphic provided by: Wealth-Lab. |
| |
Mr. Kupfer is a market professional and amateur stock market commentator. Disclosure: It is likely that Mr. Kupfer has or will enter a position in any security he writes about.
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