Fractal Gold Report
Posted Aug 24, 2012
Wednesday's move up in gold was huge. Not so much in terms of points gained -- although it was a pretty chunky rally -- but more in terms of context.
There is almost no risk now that this is a false breakout, which could have led to a very quick collapse back down. There is always such risk at critical breakouts, and even though I didn't see much of a problem with this set-up, you can just never be 100% certain that the opposite energy won't come flooding in to tank a good-looking breakout move.
In the short-term, gold is in "all-or-nothing" mode where sharp bursts of upside energy are punctuated by sideways periods.
This is a great pattern, actually, for this stage of a budding move, and it should lead to more gains in the days immediately ahead. This pattern is re-energizing quickly after the bursts higher, which is the perfect short-term pattern to support a full 11-day trend right here.
Checking the daily fractal dimension (first chart above) confirms that there is still plenty of available energy to power a sizeable 11-day rally. But the best news of all is the fractal dimension readings on the weekly and monthly charts.
There is a monstrous amount of energy available to power a massive trend in gold. This is an ideal set-up for a move up to the next 21-month peak, scheduled to arrive in June or July 2013. In fact, if gold just behaves as it has throughout this long bull market -- nothing special or out-of-the-ordinary required -- then the expected target range for this 21-month peak is $2,500 to $2,800, with the potential for a short-term overreaction up to just under $3,000.
This is a sample issue of the daily Fractal Gold Report. For a 30-day free trial, which includes a bonus subscription to our daily report on equity markets, please follow this link.
Aug 23, 2012
David Nichols publishes the Fractal
Gold Report, a daily report covering the gold market using proprietary
techniques that go beyond technical and fundamental analysis.
The Fractal Gold Report is available by subscription here.
Fractal Gold Report. All Rights Reserved.