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Yes a little bit of shine has come back to gold after so long in the doldrums. Let’s look at the daily Elliott:
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When I see a wave five set up it gives me a jolt of excitement but this has only recently appeared. What we can see is that gold is in a short term retreat and this is a possible precursor to a move higher which will take it up to around US$1060/oz. Maybe not a lot to get overexcited about but movement nevertheless.
But let’s look at a weekly bar:
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I have chosen a bar chart as it shows the previous tops and we can see that it topped out at around US$1034 over a year ago and this was followed by a solid retreat. Further attempts were made at a new high and failed and I am suggesting that we may see yet another failure. At best I don’t think gold can go significantly higher for the moment.
And if we look at a monthly we can see some ‘movement at the station’:
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We can see by the negative divergence that gold is lacking momentum and we could even see it come back to about the US$700 level.
So I would not be looking at the long trend in gold to make money but there will be great trading opportunities in the coming years. Yes years.
Enjoy the ride
Tom Scollon
Chief Analyst
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