Gold Technical Analysis for September 8, 2011 |
The gold markets fell on Wednesday as traders around the world decided to take on more risk in the various stock markets in reaction to the German high court allowing the bailout of Greece to continue. The pullback has been significant, falling as much as $60 at one point. The other thing to be aware of is the double top we formed at the $1,920 mark. Until this gets broken, we cannot suggest buying as this is starting to look more and more like a top of sorts.
Granted, it isn’t the top for good – rather for just a while. The market is way overbought, and this market has a tendency to shake out the late traders which are almost always chasing performance. The area we like is the $1,700 area, and slightly higher. We feel this pullback has been a long time coming, and that it is vitally necessary for the long-term growth of gold to continue. We don’t sell we just wait for gold to go on sale.
If we get a break of the double top pattern, we might be forced to buy at that point as well.
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