This guy is good. From June:
<Gold - It has inspired more dreams and, at the same time, dashed more hopes than any other substance the world has ever known. This time around, it won't be any different. The bearishness that existed last week reached a level that I have never experienced before, and I've been in this business for a couple of decades. I was informed that the bull market was over and we'd entered a new bear market by numerous clients who were old enough, and educated enough, to know better. The yellow metal would be back at US $400.00 an ounce before you knew it and, if I was smart, I'd better take the short side while I had some money left to bet with. So what did I do faced with the new reality? I went out and bought gold, that's what I did! When ever people are willing to throw there gold away, you can bet your last shekel I'll be there to fish it out of the trash can.
That's the psychological part of gold; what about the technical aspects of the precious metal. As you can see in the daily chart of gold below, we can see that by mid-June gold had reached an extremely oversold condition as it traded all the way down to its 200-dma. To put this secondary reaction in perspective, before the rally began gold had traded in a range for $534.00 to $571.00 for
what seemed like an eternity. What the reaction succeeded in doing is simply return to the level we broke out from. No more and no less. On a closing basis, we held strong support at $553.00 bases the August Gold futures contract and that just happened to be my original projection for a bottom. 4 That decline amounts to a 25% correction, the largest such reaction to date.
As you may recall, I wrote an article back in February where I talked about the significance of $569.70 (spot price) and the 50% principal. The $569.70 price just happens to be a 50% retracement from the 1999 bear market low back up to the 1980 bull market high. Once we managed two consecutive closes above that target, you could rest assured that, sooner or later, we would test the 887.50 all-time high. We saw the two consecutive closes above the target and then gold really took off. It's no coincidence that the recent negative reaction came back down to that target, with two marginal closes below it, and then proceeded to rally back up to the $580.00 area. I now believe that gold should consolidate in a trading range that will extend from $553.00 on the low side on up to $588.60 on the high side. This consolidation period should last a period of weeks followed by an attack of good resistance at $644.70 and then a test of the $728.60 resistance that stopped the last rally. I expect this process to take the remainder of the year and a break of 728.60 should occur by Christmas, assuming there is no external crisis that could affect the price one way or the other.>>>>>>
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