How Long Can the Gold Rally Continue? - City Index

LONDON, June 27, 2011 -

Gold rose to an all-time high in late April, and its price
continued to stay above its 50-day moving average in May. How long
can the gold rally continue? Sandy Jadeja of City Index ( href="www.cityindex.co.uk/">www.cityindex.co.uk/)
sheds some light on the situation.

“It was in 2002 that technical indicators showed signs of a
bullish move that has helped gold reach meteoric highs and set the
commodity on a parabolic rise, which has not shown any signs of
weakness,” states the href="www.cityindex.co.uk/">financial trading
analyst.

“However there are some technicians who believe that a correction
is in the making. In 2008 after reaching a high of $1,039 Gold fell
to a low of $724 and has since then only seen minor pullbacks. The
current move from the $724 low appears to be a Wave three in an
Elliot Wave formation. If true then a correction equal to the
previous move could see a loss of -30% or greater take place.”

Spread betting and CFD trading both allow you to profit from a
falling market as well as a rising one. This ability to short sell
could prove invaluable for gold speculators. Mr. Jadeja
continues:

“As long as Gold can maintain its pricing level above $1,389,
the bullish trend is likely to continue. If a break below this
level takes place then a correction towards $1,250 could become a
possibility and if the decline takes a severe turn, then the doors
could open to $1,050.

“Until a reversal takes place the price of Gold looks set to
continue higher for the near term.”

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initial deposit. Ensure you fully understand the risks.

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Contact: Joshua Raymond, City Index, +44(0)20-7107-7002, joshua.raymond[at]cityindex.co.uk