Hoye

After five weeks of non-stop advance, the precious metals took a breather for the past two days. Gold has found resistance at the Fibonacci 62% retracement level of the $1923 to $1523 decline and above the resistance line while the HUI managed to recover 50% and stop at its resistance line. These are the same retracements that occurred in the March 2004 correlation we have been monitoring. For gold to remain constructive we need to see prices hold at $1675 and the HUI at 517. Look for another push to the upside, peaking in the latter part of February with a test of $1900 or possibly $2155.

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The scheduled late-February early-March high, coupled with the HUI testing its upper 50-day Bollinger Band, concluded with the dramatic $100 ‘leap day’ break in gold on February 29th. The next two time windows of significance were to be lows at the end of March and again at the end of May with the best advance following the second low.

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ancona said:

I think the take down is over for now.

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