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What's Next for Gold?

Rod David

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

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Today's Highlight: Two days of volatile gold action didn't make a third volatile session any more predictive. Wednesday's gold rally needs more than any other session to be confirmed on Thursday. If it's not, then a much larger resolution down should not be far behind.

Dollar Basket
Dec Contract DX; (UUP), (UDN)
Wednesday's gap down didn't trend down, but still suggests that the recent bounce didn't gain traction for extending higher into a recovery.

Dec Contract EC; (FXE)
Gapping up Wednesday keeps alive the potential for retesting recent highs up to 1.3580 before any durable downleg could gain traction.

Dec Contract GC; (GLD)
Closing above 1313.00 Tuesday had avoided signaling momentum reversed down. Rallying to within $2 of 1341.00 Wednesday doesn't yet signal momentum reversing up. Absent a second consecutive higher close Thursday, a corrective bounce will have likely ended, with a close back under 1321.00 signaling a new downleg underway.

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Dec Contract SI; (SLV)
Closing above 21.88-21.95 would have signaled a new upleg underway. It was only tested, but a second consecutive higher close Thursday would still confirm momentum had reversed up.

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30-year Treasury
Dec Contract US; (TLT)
Price firmed to fresh highs above 133-10 Wednesday, perhaps as a flight to safety amid stock market weakness. Regardless of its catalyst, the second consecutive higher close suggests a third higher close is due. The recovery can extend higher so long as pullbacks now hold 132-22 as support.

Crude Oil
Oct Contract CL; (USO)
A small bounce Wednesday never became a rally, and it was retraced back to Tuesday's 102.30 support, whose break would next target 99.10.

Natural Gas
Oct Contract NG; (UNG), (UNL)
Tuesday's sharp slide did not extend lower Wednesday, although it having been a second consecutive lower close does suggest a third fresh low close will precede any recovery potential.
Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.

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