Gold: Door Too Small for Everyone Who Wanted Out
The metals, as we suggested, were heavily overextended on the short order side and Friday’s explosive rally demonstrated the effect of short covering in a market. The catalyst may have been some profit taking ahead of the G-20 meeting on the weekend, as the rally extended not only on the metals, but the energy group and the US$ also experienced some squaring. Technically, the rally in gold was sufficient to breach the $1,183.50 resistance level, which may bode well for continued short-term strength. The G-20 seem to be on the same page, agreeing to a $2 trillion dollar plan to boost growth over the next 5 years. The story remains one of dollar/equity strength, with the $1,183 level now acting as support. The next resistance level of substance is the $1,202 target. |
