by Erik McCurdy
Gold closed slightly higher this week, moving up to a new all-time high and reconfirming the long-term breakout that occurred last week. Technical indicators remain bullish overall on the weekly chart, supporting a continuation of the rally.
We are 11 weeks into the cycle following the Intermediate-Term Cycle Low (ITCL) that occurred during the week ending January 28. The recent breakout to new all-time highs has reconfirmed the bullish translation of the current cycle. Looking ahead, the next Intermediate-Term Cycle High (ITCH) will likely occur sometime during the next 2 to 6 weeks, and the window during which the next ITCL is likely to occur is from May 20 to July 8, with our best estimate being in the June 10 to July 8 range.
A strong monthly close in April would reconfirm the bullish translation of the annual cycle from January and forecast additional gains during the second half of 2011.
As noted last week, the US dollar index will likely form an ITCL sometime during the next two weeks and it will be important to monitor the gold market response to the forthcoming short-term rebound in the dollar. If gold is able to hold near recent all-time highs as the dollar reacts, that positive divergence would be a bullish sign supporting a continuation of the long-term uptrend.
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Erik McCurdy is the senior market technician for Prometheus Market Insight and has been analyzing charts every day for over 15 years. The software program that he developed to monitor long-term stock market trends has correctly predicted over 90% of the long-term turning points in the S&P 500 index since 1940. His Gold Currency Index has predicted every major trend change in the US gold market since its creation in 2005. The Prometheus Market Insight newsletter service provides daily, weekly and monthly forecasts for stocks, bonds, currencies, commodities and precious metals using proven computer models that base their predictions on technical and cycle analysis. Stay in touch:
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