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The Gold Picture in Three Time Frames

The Gold Picture in Three Time Frames
by Carl Swenlin

Whenever possible it is best to look at a price index in the long-, medium-, and short-term time frames. For me that means analyzing monthly, weekly, and daily bar charts.

(see charts)

Bottom Line: As of 10/3/2011 gold is on a Trend Model NEUTRAL signal (in cash or fully hedged), but the 50-EMA is still above the 200-EMA, so gold is bullish long-term. After a blowoff top in August a much needed correction is in progress. A logical downside target based upon a four-year rising trend line is 1450. Of course, a major change in the drama coming from the EU could override our technical expectations, but it is interesting that the price of gold has been in decline even as the situation in the EU has become even more critical.

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