Falling back to $1,362 after making that daily high, gold recovered but to a lower price. It then fell in a flag-like fasion, briefly breaching $1,362 before boucing up and settling around it. The second breach, at 11:45, prefaced a breakdown which took the metal down to its daily low of $1,353.50. In the middle of that stumble, Hosni Mubarak resigned the Egyptian Presidency. The gold market treated the event as further reason to sell, presumably because the crisis was resolved.
Despite a recovery, the wind was let out of gold's sails; $1,360 became a ceiling as it drifted down in later afternoon. At the end of the week, the spot price was $1,356.80 for a drop of $6.70 on the day. The Kitco Gold Index split the gain into -$3.00 for predominant selling and -$3.70 for a strengthening greenback.
Gold's six-month chart, from Stockcharts.com, shows its retreat from the $1,364 level:
As pullbacks go, this one wasn't that bad. The level at which gold closed today is about the same as its short-term top before $1,360 was breached on Tuesday. Granted that it stayed flat for the two previous days, but that kind of behavior isn't that strange during consolidations. As long as $1,350 holds, there won't be that much reason to worry over the metal's near-term fate.
Like gold, the U.S. Dollar Index had a choppy day. Unlike gold, it ended up with a gain. The Index managed to triple-top at 78.66 in the morning and very early afternoon. Subsequently, it slid down but not to as low a level as it reached during late morning. That triple-topping took the wind out of its own sails, and it glided to a close of 78.40.
Its own six-month chart, also from Stockcharts.com, shows yesterday's gain being built on today:
As consistent with its recently-completed inverse head-and-shoulders bottom, the Index kept on going up after breaking through the neckline. Its daily high was well above its close, and it did lose momentum in the afternoon, but its overall gain was still fairly good. As of now, its chart gives no reason to expect a substantial downturn, although a short-term pullback could occur.
Gold acted a little disappointing at the end of the week, but its slight gain for the whole week points to an underlying uptrend. Since this is a consolidation phase, volatility and fluctuations should be expected. But, those fluctuations create buying opportunities for accumulators. In this stage in the game, range-senstitive accumulation isn't that bad an idea for regular gold buyers.
In closing, I'd like to thank you for stopping by and reading what I've got to point out. Have a great weekend, and I hope you don't miss any veggies.
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