Gold Head and Shoulders Update

Back in July of 2009 I sent out this weekly gold chart via a Bloomberg terminal. At the time I commented that if spot bullion could break the $1000.00 level and hold those gains, the technical price objective would be around $1350.00. 
I did not know there would be a QE1 or a QE2 or that sovereign nations would be teetering on financial collapse, but that is the "magic" of technical analysis. If you use proper money management, the market often signals where prices are going.

I am not saying that this is the top, all the ingredients that got the market here are still if place, but it seems like the momentum play has lost it's steam. This might prove to be a "buy the rumor...sell the fact" scenario.

Governments are beginning to take the steps needed to get their finances in order.
And the "gold story" has been well documented in the press and "buy gold" ads are constantly aired on AM radio. So where is the new buying going to come from?

The daily gold chart posted below warrants some attention. If the gold market breaks below the "neckline" ($1340.00) gold could easily fall to the $1200.00 to $1250.00 price range.