After a week of exhibiting great relative strength, spot gold prices, and with them the streetTRACKS Gold Shares (GLD), finally caved in to the intense selling pressure exerted by "the liquidators." The liquidators are those managers and investors who bailed out of the precious metals to raise cash, likely to meet anticipated margin calls or merely to preserve capital during very tumultuous times. From a strict technical perspective, the sideways 5-month upper coil from the February 27 high within the larger coil off of the May 2006 high at 731.25 remain essentially intact at this time. However, a violation of the prior near-term coil support point at 639.10 will start to inflict much more serious damage to the gold pattern.



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.