   |
|||
What does 2005 have in store for the yellow metal?Clif Droke
snippet Below is an extract from Clif Droke's Gold Strategies Review for Feb 2005 In the previous two newsletters we looked at the the disparity between the price of gold (which at that time was at a multi-year high) and the lagging XAU gold stock index. This was a big concern for us since a negative divergence between the price of gold and the XAU is usually bearish for the gold stock sector in general sooner or later. We asked the question, "Is the relative weakness in gold stocks sending a message that the yellow metal is nearing a short-term peak?" Obviously this question was answered in the affirmative as gold peaked out recently and has dipped to the $420 area and stayed there for almost the entire month of January. Now that gold is now at the $420 area (mentioned as being the secondary downside target where the dominant short-term trend and bias lines intersect in the charts), what can we expect for the weeks and months ahead? I still believe the likelihood is that we'll see a re-test of the lower boundary of gold's longer-term uptrend channel which intersects at approximately $400-$405, an area of great technical and psychological significance for the yellow metal. Note the weekly chart of gold below where this lower boundary intersects.
More follows for subscribers, you can subscribe to the Gold Strategies Review ($21) here. --Clif Droke 321gold Inc |
