GOLD is continuing its drive higher hitting all time highs. When GOLD broke over $1125 it gave us a STRONG BUY SIGNAL with an accelerated move higher. GOLD which was already in a strong and steady up trend, is now trading even higher at a faster pace and within a new up trending channel. It is very hard to say where this could stop as it continues to hit all time highs, meaning that there is no resistance preventing it to go higher until the market decides to pull back. One may assume like I did in my November 9th analysis that GOLD could go as high as $1200 before meeting some resistance. Aside from technical analysis, going over round numbers is always psychological factor to go over. One example would be the struggle to go over 10000 with the Dow Jones. In terms of GOLD ever since it broke over this psychological $1000 level has flown much higher as you can see. At this time GOLD has 4-5 very strong support levels. The first one is the lower yellow channel line; the second is the upper blue channel line; the third is the bottom blue channel line, and the fourth and fifth are the 50 day and 200 day MA. Basically, for GOLD to fall off this very strong up trend it would have to fall sharply below these 5 strong support levels. Obviously, this is something I don't foresee for the near future, as I see GOLD going higher at least for a year or more. Like many analysts I am very bullish towards GOLD in the long term, and this will very likely go much higher. However, everyone should be careful as the short move higher at least could be led by euphoria which may be driving GOLD higher. Like some analysts fear, this could be a bubble, but the reason I think this has still more upside is the fact that the market is really starting to take notice of GOLD now, and the price may be driven by a lot of investors looking to get in on the action. In the end you may have so many people into GOLD that this potential bubble could burst. The move higher of GOLD could also continue as long as the U.S economy continues to struggle to recover. For the short term GOLD is a HOLD, for the long term a STRONG BUY. GOLD is in a major uptrend and obviously despite a few pull backs here and there, the overall tendency is to move higher. For the short term I think you should look at GOLD, $100 move at a time. What I mean by this is that if you see GOLD go over $1200, you can expect to see it easily go to $1300, and if it still moves higher $1400 would be the next stop, and so on. Like mentioned before GOLD has no resistance on a technical point of view, and the only resistance are the psychological factors.
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