Snippits from my last post.

So, are we heading to 902 and possibly the 850 mark in July?

If that happens, then maybe this summer won't be all that different after all!!

Sell at the end of May and come back and play..

Looking at the indicators, the MACD has remained above 0 throughout the Bull market and remains so. The Stochastic has just reached 83 which allows for a rise of about $300 before looking overbought. The interesting indicator here is the Bollinger Bands which are starting to pinch together in anticipation of a big move in about a month.

Moving closer in to the weekly chart, we can see that the Medium Term Delta high arrived on time and that we are heading down to MTD 4 low

which is due 15th July, though I think it may well arrive a week early. The Stochastic reflects this and is pointing down, though it should not go below the 50 level. The top we have just had on 3rd June was also perfectly on time using the 16-week cycle first spotted by Martin Armstrong.

This shows the top due in the week ending 5th June with the next one due in the week ending 25th September.

If we look at PRICE targets, it appears that we are in a “c” wave of wave 2 (of Major Wave 3). With a “c” wave in a Bull market it will probably only retrace 61.8% of the “a” wave, which gives us a downside target of $902 though the norm would be 100% for a “c” wave. Therefore if $902 is exceeded, we will be heading back to retest the 1980 closing high of $850 (with a target of $848).

One further piece of evidence that we have that may be pointing to the $850 target is the Commitment of Traders (COT) report. Last week’s data shows that the large Commercial traders have increased their short positions to 245,000 contracts. This data is always a week in arrears and this high level is normally a prelude to a reasonable correction as is shown on the chart above. So we have now looked at the long-term technical analysis that confirms that the Gold Bull is still intact and the medium term which shows that we have a few weeks of downside.

If we now zoom in on the short term for the traders amongst you, Gold should bottom in the next 24 hours, completing the “a” wave then bounce to around $960 in a “b” wave over the following week, before falling away into July to the $902 or possibly $850 levels.

The Stochastic is confirming this with a current reading of just 23.

However, there is plenty of fundamental analysis that confirms the bullish tone as well.

We heard recently that the Chinese have doubled their gold reserves over the last 5 years but this still only represents just over 1% of their total reserves and they are on record as saying that they wish to increase these to around 10%. In addition, I reproduce below two recent stories that you may not have seen, that show why gold is retaining its lustre.