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Is Gold Going to Fight This New Down Leg?


Rallying prematurely last time didn't work out so well.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: With gold's corrective bounce clearly having ended, can the outstanding move to new lows now develop quickly?

Dollar Basket
Ranging around 83.33 Wednesday had undermined the rally's momentum, but it wasn't a sell signal, which the ECB announcement exploited in sparking a surge up to 84.15 that extended higher to attack 84.95 on the Employment Situation report.

Jun Contract EC; (NYSEARCA:FXE)
Ranging down to the lower-end of the decline's 1.2955-1.3020 target Wednesday could have rallied by week's end, but the alternative was to have already extended down sharply. The ECB announcement produced the latter, dropping to 1.2875, and then extending to 1.2808 on the Employment Situation report.

Aug Contract GC; (NYSEARCA:GLD)
Despite holding the 1240.00 and then 1248.00 pullback limits, the corrective bounce never resumed to fulfill the potential of extending $4 higher to 1271.50. A drift lower to 1240.00 broke sharply lower on Friday's Employment Situation report test 1207.00, resuming the decline targeting new lows, so long as 1226.50 isn't recovered.

Sep Contract SI; (NYSEARCA:SLV)
Friday's gap down from 19.70 quickly round 18.80, and spent the balance of the session ranging narrowly just under it as resistance. The drop could extend to 18.50-18.55 before signaling a bigger decline underway

30-Year Treasury
Sep Contract US; (NYSEARCA:TLT)
Firming slightly Wednesday from what had become an extended narrowing range made the pattern likelier to break sharply lower first. The drop extended on Friday's Employment Situation report to fulfill the outstanding objective for fresh lows at 132-16. The drop has room for noise down to 131-24 before signaling it is extending to 128-10/128-14. Closing above 132-26/133-00 would signal the drop had ended.

Crude Oil
Aug Contract CL; (NYSEARCA:USO)
Friday's gap up to the 101.75 target son extended to fresh highs testing 103.30. A second consecutive higher close would confirm the 106.35 target is in-play.

Natural Gas
Aug Contract CL; (NYSEARCA:UNG, UNL)
Still testing 3.55-3.60 after having an opportunity to extend higher above 3.73 doesn't yet undermine the recovery potential, and does add that much more credibility to fresh highs being able to extend higher on trapped shorts.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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