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|Includes: SPDR Gold Trust ETF (GLD)

On Feb 16th, I posted this headline from CNBC and indicated it to be a warning sign to Gold bulls:

Today from CNBC we get: Gold Demand Hits New Records as Europeans Stockpile. Demand for gold hit an all-time high in 2011 as European, Indian and Chinese demand soared. Total demand around the world rose to 4,067 tonnes, worth around $206 billion - the first time annual demand for gold has risen above $200 billion

On Feb 16th, I posted this chart counting Fib Weeks and indicated a major direction change in Gold was possible that will carry on for the next 34 weeks.

Working our way from 2 years inward, we can see a big gap lower off a blow off top, which has now moved into defined 5 wave pattern.

Most of the GOLD Fibs move in 61% increments, so my price target to complete Wave 1 of an epxected 5 wave bear move, is at Line 2.

The 1 year view has a better look at the alternate 5 of 5 count possibilities. Again, I put a higher probability at the 61% range down because of history; but, 38% at 1500 Gold for the end of Wave 1 is possible.

Keep in mind, the stock market doesn't even realize GOLD is in a 5 wave down.

This is 3 month chart. Price projection here supports the 50% level, which is standard for all markets. We simply take the length of the initial move into the bear flag, then add that length coming out of the bear flag.

On Feb 16th, I posted this chart showing the relationship between the Euro and Gold; they tend to move hand n hand.

Here is a current Euro Dollar chart. We are clearly in the process of forming a Head N Shoulder pattern, solidly below the 200 day moving average. Very bearish for the Euro, very bearish for GOLD.


Gold has moved out of the Feb 21 week to the down side. Gold has crash below its 200 mva and is now working a 5 sub wave down pattern to complete Wave 1 of 5 Wave's down.

I was asked on Feb 16th; "Will Gold move higher because of Greece issue". My answer was then and is now, NO. Because, Banks will have to sell gold to raise cash; because they are insolvent.

War with IRAN and $150 oil, might turn this around, but I suspect GOLD will complete 5 waves lower to finish up around $1200.

Remember, the bear market will not come to a close until Gold and the DOW are 1 to 1 in price. Which means GOLD once it completes the 5 waves lower, will be a great buy-but not until then.

According to Stock Traders Almanac, the last week of March is usually good for Gold-so expect WAVE 2 recovery maybe around that time frame. (If they are correct)

Tim Kathlina