There is not very much to say about Gold today. Price has continued to struggle upwards in a very weary manner, and still needs to form a clear 40-day cycle peak.
Price is still “rising up” the 20-week FLD, and several other FLD’s. It is expected to break through all of these FLD’s which would provide a final stamp of confirmation on the peak (of at least 18-month magnitude) on 6 September 2011.
Confirmation of the latest 40-day cycle peak will be provided by price crossing below the 20-day VTL, shown here (with the 10-day VTL):
And so the price of Gold is expected to fall lower over the coming months.
I am often challenged by friends who believe that Gold will form a “safe-haven” when stocks tumble, and they ask how I resolve the “dilemma” of these two bearish (and thus supposedly contradictory) analyses (read the ST Outlooks for the S&P 500), claiming that “everyone knows” that the Gold price rises when stock markets fall. In fact nothing could be further from the truth. At times the two have an inverse correlation, because the cycles that influence the price of Gold are different to the cycles that influence the prices of stocks, but there are as many times when the two markets have a direct correlation and move in the same direction at the same time.
The solution to the “dilemma” is (need I say?) in the study of the cycles!