Gold

Here is a daily chart of June gold showing the last $150 of the bull market advance since November of 2005.

Soon after I started this blog a year ago I said that the bull market in gold would carry into the 500-540 range. Once the market reached that range I started to look for signs that the bull market from the 252 level in 1999 was over. But the market has proven consistently stronger than I have expected.

You can see from the chart that resistance at 598 has been left behind and from this I conclude that the market is headed for stronger resistance near 661, the 2 5/8 multiple of the 252 low.

Note how the upswings in gold have been very regular. The last two were $82 and $84 in length and at the 622 level the market will have moved up $82 from its last swing low. This is reason to expect some sort of reaction from 622 but if one develops it should not drop the market below 578 at which point it would equal the length of each of the two preceeding reactions.

Looking at the hourly chart which sits above the daily chart you can see that the hourly swings have not yet shown any sign that a drop to 578 has started - no shortening of upswings or deepening of reactions, no sequence of lower tops, etc. Given the bull market target is now 661 I think that it would be a mistake to expect more than a 10-15 dollar drop from here until and unless the hourly swing chart starts to show some definite bearish indication.