Normally, at the beginning of each new year, I will make a personal forecast of the likely gold range.
However, due to constraints of accessibility to charting software and real time feed, my forecast for 2009 has been delayed somewhat.
Having pored over the charts for almost a day, it would seem that the range for this year is, if it comes true, it will be between 680 on the low side and 1300 on the high side. That being said, it does not mean that the top is at 1300, but rather, there is some possibility of reaching there this year. Usually, it exceeds my "tops" by around 15%. I know most people after hearing that will be totally sceptical. Who can imagine prices heading there?
Gold prices are in a dilemma at the moment as it is not sure yet whether it is going up or coming down. Or, that's what the hedge funds expect us to think. On one hand, most commodities should be weakening right now as they are in a deflationary phase and keeping a lid on prices. However, looking at the dire nature of the world economy, is a strong enough reason in itself to cause the other hand to push it higher still.
There are 2 important windows in the near term. The first window will be the week of 26 January. If prices can maintain above 830 for the week will be telling as it would be deemed to have gained sufficient inherent strength in the short term to seek further gains. The second window, will of course be more compelling and it happens the week of 6 March. If prices can maintain above 855, will portend to prices being able to sustain the rally for a longer period of time, like say, between 2 to 4 months time frame.
As with any rally, there will be obstacles placed in its path. Nearby resistance will be 890 levels and then thereafter 908. If these have been cleared successfully, it should easily open up back to 980. For now, that is how I view the market and of course, it will be influenced by 101 things that is yet to come and I could change my views from time to time.
Please note that the above is only my personal view and must not be the deciding factor of what your strategy will be. If you can not decide on your own accord, then it is better not to do anything rather then doing something on others hearsay.
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