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Gold ReviewErik Gebhard Consolidation from recent highs is keeping pressure on the yellow metal this week. Inability of prices to hold above $440 puts gold on a downward tilt in the near term. Technical indicators, which had reached overbought levels, took a negative turn this week and could flush out uncommitted longs at these levels. Prices appear headed to fill a gap on the daily chart between $434 and $432, and should find good support at $430. Big news today was the Fed's announcement of another 25 basis point hike in interest rates. Big in terms that it was covered heavily, but the revelation was more than predictable. Real speculation will begin with the next few meetings as rates reach 3.50%. Greenspan and Co. appear to want to reach this plateau with little fanfare or worry, keeping their measured pace dull and simple, lulling the market in step. However, questions about the US economy will ultimately be faced in the coming months. The US economy seems delicately balanced between steady growth and stumbling backwards on high energy costs and sporadic job creation. All it takes is a few unimpressive unemployment reports to kick out the legs of this rally in the dollar. The Fed will need to decide if it wants to shift interest rates into 5th gear going uphill or keep the economy chugging along at a respectable pace. The daily chart on the dollar index appears to be putting in a possible ascending triangle, suggesting that continued strength in the dollar may just be in reach. Does this strength sap the energy from the gold market though? It may provide the catalyst to correct lower and ease the overbought conditions, but another gold/dollar rally could in the works. Based on this past month, it would not be inconceivable. Expect a pullback to near $430. MACD has turned negative and
the Line Oscillator has crossed negative. Resistance can be found
at $438.7, $440, and $442. Major upside goals are closes above
$442 and $445. Support can be found at $436.3, $434, and $432.
Major downside objectives are $430 and $425. Erik Gebhard |
ALTAVEST Worldwide Trading,
Inc. 
