CHARTWORKS - JUL 16, 2010
Gold

Bob Hoye
Institutional Advisors
Posted Jul 20, 2010

The upside Exhaustion Alerts in the Euro Gold price during June have only been partially corrected with the drop to the 20-week average. While a bounce is possible, we continue to view the 50-week moving average as an attainable target on the downside in the coming months. As of today it sits at €834, 10% below the current price. The unwinding of the Euro price should continue to have an impact on the U.S. pricing. Based upon our anticipation of the Euro rallying from a weekly Capitulation bottom to its 50-week average (1.34) and the Euro Gold dropping to €840 we see U.S. $1125 as a reasonable target.

(Click on images to enlarge)

The failed breakout through $1260 continues to exhibit similar characteristics to those of early 1975, late 1980 and early 1983. The Bollinger Band (20, 2) has rolled over and should cap any rallies in the next few months. Look for prices to trend lower with interim lows generated once the RSI(14) reaches 30.

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Jul 16, 2010
-Bob Hoye
Institutional Advisors