Gold Futures May Consolidate
Source: Business Line (4/6/09)
"Only a daily close above $933 will signal the resumption of the uptrend. . ."
Renewing talk on IMF gold sales weighing down on gold prices, the British Prime Minister, Mr. Gordon Brown, said the G20 countries will ask the IMF to bring forward gold sales to finance and help the poorest countries.
The IMF last year said it committed to sell 403 tonnes of gold as part of a broader restructuring of its income, but the decision awaits approval from the U.S. Congress.
Comex June gold futures fell lower in line with our expectations. As mentioned in the previous update, fall below $920 important trend line support at $908-$910 levels has opened the way for a test of recent lows at $885-$875 or even lower towards $845.
Rallies to $908-$910 could prove to be a strong resistance going forward. Our favored view expects supports in the $878-$882 range and bounce back higher. Failure to do so could put prices at the risk of a test of the aforementioned lows.
Only a daily close above $933 will signal the resumption of the uptrend and head higher towards $978 or even higher towards $1,033. We believe that the third wave could have ended at $1,033 and the fourth wave that we have been tracking could have ended at $681 and fifth wave impulse in progress.