Recent news articles describing the increased long position in gold of some well-known hedgies
has certainly been a factor in the long bull candles of the last few weeks as has the speculation of QE3 courtesy of the FED. Or, since a range bound market is expected to oscillate, it could be argued that it was simply time for the bulls to prevail for a while.
Technically, the GLD chart is still in the range that began about 10 months ago. Nothing dramatic has changed as it retraces back toward the that has been tested twice and sold aggressively each time. Of interest in the context of a very short time frame is the 3 week pause that occurred the last time this price level was reached.
We don't want to make too much of the fact that though GLD short rapidly reached it's first target level in a matter of only 5 weeks, the all-important 2nd target has remained elusive for about 39 weeks. A definite bull signal. Though that in itself is not conclusive evidence that the Intermediate Swing Long is destined to prevail, we can be certain that it has provided encouragement to all gold bulls and is causing equal concern for all gold bears.
The Bear has been breached to the upside, and although normal market action would be a retest of the , that does not always occur. Notable also is the observation that the Intermediate Short has a narrower trading range before failure than the Intermediate Long.
Our analysis has not changed and we see no reason from a fundamental or technical standpoint to modify our view that gold is still in a strong bull trend and that price has been experiencing nothing more than a normal phase of profit taking and pullback. In the context of the recent parabolic move in gold , the pullback has been minor.