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What's Next for Gold?


The yellow metal's recent rally needs to be confirmed this week.

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: Two days of volatile gold action didn't make a third volatile session any more predictive. Wednesday's gold rally needs more than any other session to be confirmed on Thursday. If it's not, then a much larger resolution down should not be far behind.

Dollar Basket
Wednesday's gap down didn't trend down, but still suggests that the recent bounce didn't gain traction for extending higher into a recovery.

Dec Contract EC; (NYSEARCA:FXE)
Gapping up Wednesday keeps alive the potential for retesting recent highs up to 1.3580 before any durable downleg could gain traction.

Dec Contract GC; (NYSEARCA:GLD)
Closing above 1313.00 Tuesday had avoided signaling momentum reversed down. Rallying to within $2 of 1341.00 Wednesday doesn't yet signal momentum reversing up. Absent a second consecutive higher close Thursday, a corrective bounce will have likely ended, with a close back under 1321.00 signaling a new downleg underway.

Dec Contract SI; (NYSEARCA:SLV)
Closing above 21.88-21.95 would have signaled a new upleg underway. It was only tested, but a second consecutive higher close Thursday would still confirm momentum had reversed up.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Price firmed to fresh highs above 133-10 Wednesday, perhaps as a flight to safety amid stock market weakness. Regardless of its catalyst, the second consecutive higher close suggests a third higher close is due. The recovery can extend higher so long as pullbacks now hold 132-22 as support.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
A small bounce Wednesday never became a rally, and it was retraced back to Tuesday's 102.30 support, whose break would next target 99.10.

Natural Gas
Tuesday's sharp slide did not extend lower Wednesday, although it having been a second consecutive lower close does suggest a third fresh low close will precede any recovery potential.

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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