Is gold entering it's 3rd wave???From today's Financial Sense Online.
Regards, DH
"Will Gold Pull Back?
While the interest rate trend has no clear direction, gold has moved into new high ground in a manner that is easily understandable and clear. It is in an uptrend as shown in the 3-year weekly chart.
The up trend is obvious and gold’s adherence to technical analysis principles during its long-term linear uptrend suggests a key technical level ($457) that is well worth watching in the near term.
As shown in the daily chart, Gold has broken its former high at about $457 over the last 2 weeks. This technical resistance break likely may have traders anxious to enter their long positions around the $457 former resistance level that is now potential support. In addition, as shown in the RSI indicator, after being overbought, the RSI is now below 70 (as of Wednesday evening). There may be legions of traders waiting for the apparent inevitable pullback in the price of gold to buy. Yet if the recent action in gold represents a fundamental change such as the next major up leg of its bull market, then the technical pullback to support may fail to materialize. If the pullback to support does not occur, this would be especially bullish for gold in the intermediate term. While a failure to produce a pullback to former resistance wouldn’t be the most likely technical behavior, such a failure may confirm other evidence pointing to the beginning of Wave 3 of the gold bull market. A pullback to or even temporarily below support may be a low risk entry point to buy.
There’s some action in the Gold Bugs Index ($HUI), which also suggests that the character of the gold market may be changing. The HUI has been in a well-defined trading range since November of 2003. Two times before, the HUI reached the top of its trading range, only to be quickly turned back. Yet this time, the HUI is consolidating at the upper end of its trading range. Is this suggesting a positive change of character in the gold market?
There is similar action in the XAU.
These two indices deserve attention. A failure of the XAU at the 110 level may signal a downward move back to the bottom of the trading range at 80. A decisive break above 110 may indicate a move up to 140. A leading stock in the precious metals sector, Gold Corp. (GG), may be signaling that the direction of the trading range may be up."