Gold price loses altitude on profit taking headline into the weekend

New York (Aug 7)  Gold futures prices are trading at session lows and are solidly down in late-morning trading Friday. After hitting a record high of $2,078.00 overnight, basis October Comex futures, prices have backed off following a somewhat upbeat U.S. jobs report and as the U.S. dollar index has made a solid rebound from its two-year low hit on Thursday. The other key “outside market,” crude oil, also sees its prices weaker today.

Remember that bigger upside price moves in up-trending markets tend to see bigger downside corrections. Price corrections in uptrends are actually healthy for the extension of the uptrends. A markets that goes “parabolic” in trading terms (nearly straight up) tends to see the price uptrend in its very late stages, and then a market top is formed. The fact that gold and silver are seeing price corrections in their strong uptrends is healthy for the continuation of the price uptrends.

Of course, it’s natural for the bulls to get a bit queasy when the big downside corrections occur. What is important is that any big downside price corrections do not violate and negate the price uptrend on the chart. (For primer on determining price trends and when they end, I wrote an educational feature a while back. If you’d like to read it, send me an email at jwyckoff@kitco.com and I’d be happy to attach it an email it to you.)

October gold was last down $29.80 at $2,028.20.

KitcoNews

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