by Erik McCurdy, Prometheus Market Insight
Although gold prices have been moving lower since the beginning of October, the consolidation formation on the weekly chart that we have been monitoring since early September continues to track the bullish scenario that we outlined at the time, favoring an eventual resumption of the long-term uptrend. The short-term decline has returned to congestion support in the 1,660 area where the secular bull market will face its next important test.
With respect to intermediate-term cycle analysis, prices have declined as expected following the formation of the second half cycle high (HCH) of the cycle from May.
The development of the forthcoming intermediate-term cycle low (ITCL) and the character of the subsequent rebound will provide the next signal with respect to long-term direction, so it will be important to monitor price behavior closely during the next few weeks.
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About the Author
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.