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Gold - Up $7 at $434.70

Technical observations of

Bob Hoye
Institutional Advisors
posted February 24, 2005

Following the capitulation readings in Gold on February 7th ($412.70), I anticipated an initial rally into the $430 to $435 range. With today's decline in the US Dollar, the price of gold has jumped by $7 to $434.70. I am making a small adjustment to the initial targets. Based upon the similar trading patterns that I am tracking, I believe that the high close for this part of the move could be a shade higher; around $437 +/- $2.

The next decline should be minimal at around 3% to 5% below the high price. From a quantitative perspective, there are two technical readings I would like to see. Firstly, the RSI(14) is currently at 65 and I would view the first 11 to 14 point decline in the index as an opportunity to buy on a dip. Secondly, the low of the correction should coincide with a CCI(8) reading at -100.

Going the other way, the dollar index is approaching good support.

Bob Hoye
Institutional Advisors


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