Gold Bulls Flex Their Muscles

February gold futures on Wednesday morning hit a fresh two-month high of $871.30 an ounce. The recent sharp depreciation of the value of the U.S. dollar versus the other major currencies has been a bullish catalyst for the precious yellow metal. February gold is presently in a two-month-old uptrend from the October contract low of $688.00 an ounce. The next upside price objective for the resurgent gold market bulls is pushing and closing prices above solid overhead trend-line resistance at the $890.00 area.


click on the chart to enlarge
gold_futures_feb09.gif
That downtrend line is still in place on the daily chart and is drawn from the July and October highs. Above that lies major psychological resistance at $900.00 an ounce and then solid technical resistance at the October high of $938.80. On the downside, chart support for February gold is located at $8.50 and then at Wednesday’s low of $847.20. Below that is located strong technical support at the $835.00 area. Major psychological support is then located at $800.00. Any corrective bounce in the value of the U.S. dollar would very likely find the gold market is a solid corrective pullback.–Stay tuned! Jim Wyckoff

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4 Responses to Gold Bulls Flex Their Muscles

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  4. john December 22, 2008 at 7:22 am #

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