Richard Perry
Independent Analyst
Anyone who wants to see an excellent example of Fibonacci retracements at work can look at the move of gold yesterday. I have been talking about the fact that once the support at $1271.85 had been breached the loss of the 23.6% Fibonacci retracement (around $1274) of the bull run $1168.25/$1306.20 would mean that the gold price would subsequently fall back to the 38.2% Fib line at $1254. Yesterday the price did exactly that. Te implied target from the intraday top pattern of $1252 has also been hit and since then we have seen a consolidation. I see this as a good development for the bulls as the price has pulled back to the breakout support around $1255 (the old key October high) which I see as a medium term buying level. The next job is for the bulls to form some support around these levels (next support is at $1243.60) and if it can build then the unwinding can be seen as a positive development. For now I am turning neutral near term, but I am now hoping for the bulls to find their feet once more.
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