A meagre drop in the Dow of 40 points and oil down a scant $0.25 and gold blew past $1,222 (a buy signal) and surged to the next resistance point of $1,237, before profit taking took hold. This move is worrisome. The big money is very nervous. It suggests that more pain may be in store for equity markets and capital is looking for protection. The back-fill has completed on all levels and assuming no positive surge in equities, higher prices for gold are in the cards. $ 1,222 now sets up as legitimate support, with the $1,237 target as the first sight line, with a short-term target at $1,265 in play.My view:
A cup and handle has formed on the spot gold chart. Target is $1260 to $1270.
Today is also options expiration. Let's see how this all plays out as the smart money starts to consider equities risky.