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Will Gold's Rally Continue Into the Weekend?


Perhaps the impending illiquidity exacerbated it, but Friday's surge can absorb selling pressure.

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 extended sharply higher Friday to confirm Thursday's breakout. The only two questions now seem to be how much higher, and how quickly.

Dollar Basket
Friday's dip back under Thursday's low recovered enough to spend the afternoon ranging around 81.45, whose recovery already suggests that a bottom has formed and that a new upleg is underway.

Sep Contract EC; (NYSEARCA:FXE)
Friday's bounce off of 1.3333 essentially filled the gap back up to Tuesday's 1.3422 close. A reaction down prevented the bounce from gaining traction, and now back under 1.3360 would signal momentum reversing down.

Oct Contract GC; (NYSEARCA:GLD)
Thursday's breakout to 1381.00 extended higher without delay Friday, extending to attack 1399.00. The rally's momentum now targeting 1410.00 remains intact so long as pullbacks now hold 1388.00, and momentum would then reverse down under 1383.00.

Sep Contract SI; (NYSEARCA:SLV)
Friday morning's surge through 23.50 eventually probed a dime above 24.00. There is potential to 24.55 so long as pullbacks now hold 23.40. But a close under 23.20 would be needed to signal momentum reversing down.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Friday's early break above 131-00 resistance extended to test 131-30 resistance intraday. Resistance stretches up to 132-04 and 132-10 before assuming Wednesday night's drop to within 10 ticks of the 128-18 target has fulfilled the decline, which would be back in-play under 131-00.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Despite not yet completing its pullback objective to at least 103.25, Thursday's bounce to 105.20 extended Friday to 106.95. Back under 105.40 would signal the bounce had ended, and under 104.90 would resume the decline, targeting 103.25 and potentially 102.65.

Natural Gas
The week was filled with not confirming Monday's breakout, not immediately correcting the weak buying pressure, and then trying to extend higher prematurely. Even Friday's dip was suspicious for perhaps being too shallow. But rallying Monday from the dip to 3.48-3.50 would still be credible for resuming the rally.

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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