Alert: Gold Setting Up For A Three Day Bounce

Gold has been hammered over the last couple weeks, after making all time highs. The SPDR Gold Trust GLD has fallen from an all time high of $139.54 to a low today of $129.07. This fall has been categorized by bearish flag pattern after bearish flag pattern playing out to the downside. It has been classic. While gold has fallen sharply, it now is entering a level where it may find some solid support. In addition, many gold stocks have fallen to their 200 moving averages on the daily charts. This also tells us there may be a bounce in the short run. Just to make it clear, this is not a long term bounce, just a bounce over a few days that may start today or tomorrow. As discussed above, some gold stocks are hammering into major support on the daily charts. Not the charts of Yamana Gold Inc. AUY and Barrick Gold Corporation ABX. Both have fallen dramatically in recent weeks but now sit on the 200 moving averages. In addition, the fact that gold now sits on solid support, things seem to be in order for a bounce. The GLD has major support at the $129.00 level, hit today. Gold is a tricky commodity to figure out. It relies on two major factors for its pricing. The first is the easy one, the U.S. Dollar. When the Dollar moves up, gold usually drops. The second factor is bearish sentiment. When investors and traders get extremely bearish on the markets, money runs into gold for safety. This recent drop has been headed by market optimism, rather than a move higher in the U.S Dollar. Gareth Soloway InTheMoneyStocks.com