Gold Price "Heads Up"

Gold went out today around $927 0z. It failed to hold the strong
rally uptrend from 11/08 into 02/09, and now it is close to a
further breakdown on a more extended uptrend measured from
11/08 with an intermediate "touch" of the line around mid- April
' 09. This is a charitable read since the lengthier uptrend has yet
to fully confirm by taking out the Feb. high. Failure of gold to
rally over the next 5 trading days could set the metal up for a
deeper correction down to the $800 level. Time to pay a little
more attention.

The gold macro directional indicator has moved steadily higher in
2009 on expanded monetary liquidity, a rising oil price and a strong
rally in industrial commodities. But the indicator has also leveled
off over the past 2 weeks and its trend, like that of gold, is about to
be tested, especially as oil has flattened out and turned a little
wobbly around $70 bl.

Since gold led the rally back into riskier assets off its 11/08 low,
it's worth watching shorter term from a broader perspective.

Daily gold chart here.