Potential Intermediate Term Targets for Gold and Gold Stocks
The precious metals complex is correcting in the near-term; expect that to continue for the next several weeks.
Starting with gold, we find it correcting and consolidating after reaching resistance at $1,800, which was an obvious short-term target. Upon a break past $1,800, the initial target would be $1,900. Since $1,800 is stronger resistance than $1,900 we can apply its distance from the bottom ($1,550) and that projects to another target of $2,050. Upon a breakout past $1,900, the market could be setting up for a potential cup and handle pattern which projects to a minimum of $2,250.
Next we analyze gold in terms of its trend channels. Note that trendline A defined resistance from 1999 to 2010 and has defined support in 2011 to 2012. The next trendline resistance comes into play at $2350 in Q3 2013 and $2550 in Q4 2013.
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