Ralph Acampora, John Murphy, and John Bollinger stand among the very best market technicians. They each have exceptional long-term records. Here, they offer their technical overview of gold and their outlooks for the precious metal. (For more on these advisors, simply click on their photos).
"Gold broke
briefly through its February high at $390 to hit the highest level in seven
years, before pulling back," says John Murphy, editor of
stockcharts.com. "Although the long-term gold chart still looks bullish, we could
be seeing a short-term top. Given the size of the recent advance, a setback
isn't too surprising. The horizontal lines on the XAU chart are Fibonacci
retracement levels, which often act as support levels. A fall back to the late
August low at 85, for example, would represent a 50% retracement of the advance
that started in mid-July. I wouldn't be suprised to the XAU test that level. My
longer-term outlook on gold stocks, however, remains bullish.
"The US Dollar currently appears oversold on a very short-term
basis but there is still the potential for this currency to drop back to its
June low of 92.30 on the Dollar Index," notes Ralph Acampora, director of technical research
at Prudential Financial. "The CRB Index is near its high; this strength is
due to the recent rise in energy and gold. Meanwhile, for gold, the trend is
still up with targets of 402 and 420 visible; any near term pull back would
encounter support at the 372.20 level."
"The recent pullbacks in gold have been
shallow and of short duration and the current pullback is shaping up right along
those lines suggesting that the trend is still positive for the metal," says
John Bollinger, editor of The Capital Growth Letter.
"This bears careful
watching as a downturn from these high levels could lead to a meaningful
correction. A critical test for gold lies just ahead. Early this year the
precious metal approached $390 only to fall $70 in a few weeks. Now we find
ourselves eying that level again. Just last week gold traded $383 and $375 looks
like short-term equilibrium. If we get turned back again from $390, the words
'double top' will be on everybody's minds. Best scenario, rip through $390 and
take on the big test, the psychologically important level of $400. Worst-case,
head back down and build up strength for another
try."