Comex Gold Futures (continuous) Contract as of the week ending 1st June 2007 showed resilience beyond the call of duty as it found support at the .707 Fibonacci level of the previous run up. It must be noted that there was a change of contract from the June Gold futures to the August contract as volume kicked during the week.
After period of “accumulation” between the .50 (666.20) and the .707 ( 653.10) fibonacci levels before an explosive upward move. Again we must note the change of contract may have had some influence so the coming weeks action will be of great interest.
Considering the overhead resistance Gold is to encounter you would feel very confident as a buyer of Gold at the levels mentioned above and the future prospects of Gold taking out the psychological level of 700.
Obviously time will tell …
If anyone was ever in doubt of the inverse relationship between the U.S Dollar and Gold as the views expressed by Mr. Sinclair take a look at the charts. Where Gold accumulated at the .707 Fibonacci level the U.S Dollar appears to be distributing at the .707 level.
Could we expect a hard downward swing to re-test the .8110 low in the U.S Dollar???
We do have support at the various “Fibonacci Levels” worth looking at, however should Gold continue on its merry way and test the 700 level you could safely bet that the U.S Dollar will give up the ghost and not only re-test the .8110 level but also the .8048 level.
Should those levels of support fall we certainly have history in the making and the 1970’s - 1980 all over again.
Again for a more detailed round up of the markets please review Dan Norcini’s excellent market summaries posted regularly on Mr. Sinclair’s site.
