Gold Takes a Leap, but Is There More?

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"Gold had its best day in months yesterday, but how long will the animal spirits last?"

Gold had its best day in months yesterday, but how long will the animal spirits last? We may be better able to answer that question after we've seen how the April Comex contract interacts with two recent peaks located just above yesterday's high. They are identified in the hourly chart below and lie, respectively, at $1,110.90 and $1,118.50. Notice in the meantime how the entire length of yesterday's steeply vertical surge occurred without a visible pullback. This is a promising "impulse leg" indeed, and it would wax still more promising today if bulls were to extend the surge past the two additional peaks noted in the chart.


To achieve maximum effect, this would have to occur today (i.e., Tuesday), with no discernible pullback along the way. The very bullish outcome we desire would become more likely if DaBoyz who work the night shift are unable to coax gold down by more than a few dollars Monday night. That would be bad news for shorts who were left hanging on the ropes when regular-hours trading ended on Monday, and it is predictable that they would become a source of panic buying on Tuesday if they have been unable to reduce their exposure by then.

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