The breakout predicts another 4 to 8 weeks of gains heading into the next Intermediate-Term Cycle High (ITCH). A strong monthly close in April would reconfirm the bullish translation of the annual cycle from January and forecast additional gains during the second half of 2011.
The US dollar index will likely form an ITCL sometime during the next 3 weeks, and it will be important to monitor the gold market response to the forthcoming short-term rebound in the dollar. If gold is able to hold near recent all-time highs as the dollar reacts, that positive divergence would be a bullish sign supporting a continuation of the long-term uptrend.
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