Gold is hanging on rather impressively. A bearish signal will be given if the 1580 box is hit, but aside from that gold appears to be under accumulation. The slow “creeping up” in gold is constructive. The near upside target for gold is to get back to the 1800s. Don’t be discouraged, it may happen. Central banks are buyers here, swapping their unwanted dollars for gold. – Richard Russell Dow Theory Letters

Clive Maund’s comments below Point & Figure Chart

Gold Market Update

by Clive Maund

It now looks like we were a little too bullish in the last update, for the way gold has acted over the past week suggests that another sharp drop is imminent before the dust finally settles on this reactive phase, that it likely to take it to or some way below its recent panic lows.
On gold’s 4-month chart it is now apparent that a bear Pennant has been forming since the panic bottom, with the weak upside volume portending an imminent breakdown and steep drop. A reader pointed out to me during last week that gold’s panic lows occurred in thin trading on the Hong Kong market, and for this reason we do not have to factor in the tail of the hammer candlestick when deciding where to draw the boundaries of the Pennant.

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