Prepared by Jamie Saettele, CMT
The 3 wave rally from the September low is viewed as a correction of the decline from the record high and should be completely retraced. Gold briefly traded under channel support and the former 1681 pivot low from late October before rebounding slightly. A look at the long term picture reveals that gold remains above long term trendlines but some of those lines are well below the current level. Even a test of the trendline that has defined price since the summer 2010 lows would result in a test of the mid 1500s (52 week average in the vicinity). A drop similar in amplitude to the one that occurred in September would reach the low 1400s.
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