Gold has hit an important Fibonacci level

Gold's dramatic rally will have surprised many traders who were still short. John C Burford looks at why it's vital to catch a trend early, and examines the charts to see where gold might go next.

In my previouspost on gold on 14 October, I noted how the market was picking itself up off the floor from the sharp decline to the $1,530 area on 26 September and all rallies to the Fibonacci 38% retrace were being turned back.

In mypost I wrote: "Note that all rallies have been stopped by the huge resistance put up by the 38% level. Now, if the market can push above this resistance, the move will very likely be sharp, as there will be masses of buy-stops in this region".

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.