Gold rises for it's second day in a row today, ending the day at 126.63, which has clearly breached our alternate target of 125.75. This rise in gold price seems a bit fishy to me, especially with it's brother etf SLV lagging so far behind. Although we are only in the second day of higher movement, typically gold and silver move in tandem with eachother. But silver usually leaves gold in the dust as far as percentage gains. What we saw today was a rather weak rally in silver which gives me reason to question if this short rally will hold.
Gold also seemed to have quite a strong price rally on extremely weak volume. This is never a tell tale sign of price strength. This looks to me a setup for a larger decline. Like I stated on Friday I would like to see at least three candle sticks closing higher above 125.75 before we can consider this to be the beginning of a short-term bull run. At the moment this does not look like a price that I would like to go long GLD. I would like gold to prove to me that we can sustain price before I become interested. The volatility at the moment is just too risky to be laying down hard earned capital.
I will be looking elsewhere for investment vehicles until we can get a clearer view of gold's direction. My main taarget is still 123 and further down, but this short rally could continue for a few days longer. I will do my best to keep you updated. Thanks!
High:126.63 Close:126.22 Main Target:123.00 Alt Target: 128.2/5