Gold has forged back above $1400 after closing beneath that level on Friday and Monday. If the metal closes at or above Friday's high of $1411.7 it could provide sufficient impetus for a test of the June high at $1423.67 and the August top at $1433.73.
The May 2nd peak at $1488.83 would be the ultimate goal, though even that would not be sufficient to embrace a new long term trend higher. That level, coming after the exceptionally steep two-day April collapse was as much a reaction to the volatility and the capitulation of the ten month fall from $1800, as it was a occasion of new-found gold conviction.
Gold's technical analysis looks supportive. The August 28th top confirmed the rising channel that has operated since June 28th. Today's low at $1384.60 confirmed the sharper trend line within the channel. In addition, Friday's CFTC open interest data, for positions up to August 27th shows a net long increase of 2.6 million ounces to 13.6 million.
Chief Market Strategist