The Gold Price Correction - Time to Focus on the Upside Now

The GOLD PRICE has NOT topped out, so that means what we are currently experiencing is just a correction. Is the gold price correction over? Hard to tell.

I will give you a check list to consider, that I have looked at for evidence of a bottom forming in the gold price. However this isn't that important to me now, as I am more focused on the upside target since this is only a correction. Don't be so concerned about nailing THE BOTTOM. I am more interested in the next Cherub above $1,033, our previous high.

Conclusion. I am ready to focus on the upside now.

Notes on the HUI (a Gold Stock Index)

Gold Stocks can show signs of a bottom before the actual metal so I look at a group of gold stocks like the HUI index for clues of a bottoming process. Looks like an ABC correction here, with a possibility of 360 on the downside. I used a French curve to expire this correction. I was adding to some of my Gold Growth stocks today since my old fashioned target has always been to add on or near the RSI 30 level. I am almost always early, but, I never have a problem sitting on my buys. I DO NOT USE STOPS.
Check list for bottoming process

• Trendline break .. check (good sign)
  
• RSI 30 ...check (great place to add)
  
• ABC formation in progress... Check (final process of a correction)
  
• French curve... in process (exhaustion move)... check
  

Gold Price Intervention is Normal

The GOLD PRICE broke a recent 1 week trend line, that made the short term traders nail the sell button all at once. The gold price moved nicely and gently down thirty dollars today. I believe this move down will not even show up on a 5 year chart.

Short term speculators that have no notion that there is an anxious intervention going on will pay the price and like Jim Sinclair says "may want to consider getting a cheaper hobby".

I stay with the plan that the intervention will not succeed in the long run and that the 4 week cycle will probably hold. The gold price low so far was put in just after a two week period during this correction.

It is not uncommon for a cycle low in this case the $880 level to be tested once again around the 4 week period but that did not happen today, the low was the $900 level today at the 4 week period . This to me is a bullish sign since it leaves the gold price with a higher low today. It is possible that consolidation could be extended with intervention and prolong the correction. I however will add to my long position in GOLD and my favorite gold shares early next week.

The "GATA Goes to Washington: Anyone Seen Our Gold?" conference in Washington, D.C., is on from Thursday, April 17, to Saturday, April 19, 2008.





GATA says in their full page ad published in The Wall Street Journal on Thursday, January 31, 2008:

"Gold's recent rise to $900 per ounce shows the price suppression scheme is faltering. When it is widely understood how central banks have been suppressing the gold, its price may rise to $3000 to $5000 or more."

Is the $1000 Gold Price Correction Over?

Is the $1,000 Correction over? Conventional technical analysis tells me the correction is over or close to it with the break to the upside of the green down trend line. I also like to look carefully at the peak to bottom cycle period in the gold price which is nearly complete. Historically it has proven to be a 3-4 week cycle form peak to bottom. So now, enter the era of consolidation and the formation of a continuation Pattern, in other words UP AND DOWN sideways action. A retest of $880 or even a final low of $850 is possible on the downside but the more interesting move in my opinion is the $1,250 point on the upside.

In the 4 week period which is coming upon us I will be dollar cost averaging in physical Gold bullion and in an allocation form at Goldmoney.