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Gold Investors Buy Signal Patience is Required

Commodities / Gold and Silver 2014 Jan 23, 2014 - 10:59 AM GMT

By: Toby_Connor

Commodities

In my last post I noted that gold could give a major buy signal in the next 2-3 weeks. Let me stress again that patience is required right here. Gold has to confirm the intermediate rally first. That means it needs to break above $1268 and make a higher high. If it doesn't do that then no buy signal will be generated. Without a reversal of the pattern of lower lows and lower highs then this is just another weak bear market rally destined to roll over and break the bulls hearts again.


So far every time gold gets close to breaking through the 1250-1260 resistance zone a huge seller materializes, usually in the pre-market, to dump several million oz. of paper gold on the market and drive gold back down. This happened again yesterday.


I can't stress enough that gold has to get above $1268 before the FOMC meeting next week. Gold can't enter the declining phase of it's daily cycle from a position of weakness below $1268. If it does then they are going to beat the crap out of it, and there is a serious threat that they could break the intermediate rally.


If they do break the intermediate rally then we are going to see $1030 gold over the next 4-5 months.

There is a serious war ongoing for control of the paper gold market and the big seller won a major battle yesterday when they prevented gold from holding above $1250. Gold needs to recover immediately and get above $1268 so the declining phase of the daily cycle can begin from a position of strength, not weakness.

So let me stress again: This is still a very dangerous market. The manipulation has not ended. Wait till the next daily cycle bottom before jumping into the sector. That bottom has to hold above the Dec. 31 low, and the only way it's going to do that is if gold can get above $1268 before this cycle tops. That means it's going to have to fight off the continued manipulation that's holding it down.

    Toby Connor

    Gold Scents  

    GoldScents is a financial blog focused on the analysis of the stock market and the secular gold bull market.   Subscriptions to the premium service includes a daily and weekend market update emailed to subscribers.  If you would like to be added to the email list that receives notice of new posts to GoldScents, or have questions,email Toby.

    © 2014 Copyright Toby Connor - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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