Following a nice rebound during the past few weeks, gold had a large sell-off last Friday. The catalyst for the sell-off was a sharp rebound in the dollar. Although the Euro and Yen have retraced all of their losses from last Friday, many gold bulls are raising doubts (Gartman covered his ENTIRE gold long at $922/oz). Many gold bulls are also expecting an intermediate-term range capped at $960/oz. But with a slew of economic data coming out in the next two weeks, I think gold will surprise everyone on the upside in the short-term. Gotta believe in the fundamentals!
From a technical point of view:
1) There is a potential inverse head and shoulder pattern. Anything above the blue neckline will be very bullish.
2) Today was an inside day, and an inside day is usually followed by a rally.
3) There is RSI divergence.
Even if there's intervention in gold (or dollar), so be it...more fuel for the gold rally.
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