First off let's go over the key cyclical points from today's action. Today gold broke above the cycle downtrend line, thus confirming August 7 as a daily cycle low.
Again I expect some short-term profit taking once gold reaches the previous high of $1348. This is the most likely resistance level for day traders and short-term traders to take profits. It's also the level that should deliver the most bangs for the buck for options expiration manipulation to begin. So I continue to think we are going to see some kind of minor pullback between now and Friday.
At this point I don't believe this pullback is going to succeed in pushing gold below $1300. This is going to be a "buying opportunity". It's going to be a tough opportunity to seize because it's going to appear like the bears are back in control of the market. But as I will explain later, I think it will just be one of many short-term manipulation events to allow big-money high-volume entries into the gold market.
For those of you waiting for a breach of $1425 before re-entering, the ...