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Gold's Breakout Can't Afford to Hesitate


Today's surge comes from shaky ground, so follow-through would help to confirm.

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: Gold's surge Wednesday comes from a base that's not very stable. A second consecutive higher close confirming Wednesday's breakout would likely make the rally's slope very steep. Not confirming could reverse down steeply, too.

Dollar Basket
Reacting down Wednesday from having held 79.80 resistance still leaves outstanding the gap back to Friday's 79.50 open, which should hold its test.

Mar Contract EC; (NYSEARCA:FXE)
While Wednesday morning's surge back to Friday's high held up to produce the minimum objective of a third higher close, it was still within the range. I'm reluctant to turn bearish until sellers exploit such weak buying, or else produce a break under prior lows. Perhaps fresh highs will develop simultaneously with the Dollar Index (above), neutralizing its attraction below.

Apr Contract GC; (NYSEARCA:GLD)
Trending up overnight through 1349.00 resistance gapped up to fresh highs. A pullback from extending already above 1370.00 would be difficult to recover, so failing to produce a second consecutive higher close would undermine potential for extending to 1378.50 and 1399.00.

May Contract SI; (NYSEARCA:SLV)
Tuesday's completion of the 20.70 pullback was rewarded by gapping up and extending higher Wednesday. A second consecutive higher close above 21.75 would signal new highs in play.

30-Year Treasury
Jun Contract US; (NYSEARCA:TLT)
Immediately following Tuesday's close above 131-10 that neutralized selling pressure, Wednesday's open gapped up through 131-24 to signal that buyers were retaking control. Extending higher intraday all but confirms that, except that touching 132-08 resistance intraday requires a close above it.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Dropping overnight to 98.30 extended down intraday to within $0.20 of the 97.35 target that became likely when Tuesday's open didn't immediately recover Monday's dip.

Natural Gas
The ongoing consolidation didn't break higher again, but this time actually broke lower. The consolidation's longevity suggests that the break lower will fail and reverse back into the range. Back above 4.65 would still trigger a breakout.

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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