As of this moment, despite the weakness in spot gold prices and the SPDR Gold Trust (GLD) this morning, the near- and intermediate-term technical conditions of the market are relatively strong. After last week’s $50 upmove, the $25 giveback at this morning’s low of $915.30, reflects a “normal” correction within an otherwise bullish market environment. Let’s remind ourselves that last week’s upside pivot reversal occurred right at the Oct-Mar up trendline. In addition, let’s notice that the upside pivot reversal returned the price structure back above the rising 50-day MA. As we speak, gold is consolidating between its 20- and 50-day MA, which usually is very positive action when the 50-day MA is rising. Once the consolidation runs its course, gold prices should thrust above the 20-day MA on the way to $960 next. Ay this juncture, only a decline that breaks the 50-day MA ($907.18 last) will weaken my current outlook.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.