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Gold: Time to Abandon the Near-term Forecast?
EWI's Metals Specialty Service's brand-new video reveals how the rally in gold fits with the big picture

By Nico Isaac
Tue, 26 Feb 2013 18:45:00 ET
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Over the past two weeks, gold prices have been on a wild ride indeed. 

The first move of consequence came on Feb. 15, in a powerful sell off that pushed prices below the $1600 level (intraday) for the first time in six months. From there the nosedive continued, until gold caught its breath at a nine-month low on Feb. 21.
 
In the days that followed gold slowly climbed -- until today (February 26): Gold saw its biggest one-day gain for the year.
 
For some investors, keeping one's footing throughout gold's recent near-term volatility is no simple task.
 
Yet this is exactly where EWI's premier, trader-focused Metals Specialty Service proves its merit.
 
On Feb. 13, Metals Specialty Service set the stage for a dramatic reversal in gold prices. There, Metals Specialty Service's editor Mike Drakulich presented a detailed video update on gold that included this bearish commentary:
 
"This is where we work from the inside out as we let the near-term patterns and resolution at key price levels help us determine how the bigger picture will resolve. Today's decline did bring us closer to the 1625 'print' low that I want to see taken out. Assuming that occurs, we will then have arrived at a critical juncture... We are getting ready to accelerate dramatically below 1625 and if we went below there, there should be no appreciable bounce. We should free fall if the real bearish count is in effect towards 1600 and lower."
 
The anticipated free-fall came to pass; gold prices plunged $60-plus per ounce before retaking the upside on Feb. 21.
 
On Feb. 20, Metals Specialty Service presented a newly updated video with this cautionary message:
 
"Two things that we got to keep in mind here: We are deeply oversold [with regard] to RSI reading and DSI percentage of bulls. Something is cooking here. When you get this oversold, you're going to see sharp and incredible moves. You could see $50 moves in gold within a 24-hour period."
 
The $60-plus rally since is a testament to such moves.
 
So, is it time to abandon the near-term bearish stance in gold?
 
Well, on Feb. 25, Metals Specialty Service editor Mike Drakulich's video update lays the answer out plain and simple:
 
"If we see a sustained rally above [a certain price level], I actually go bullish, and you have to consider that a very, very important low was made [at the Feb. 21 low of 1554]. These are key levels to watch where we would have to turn -- and turn quickly -- bullish."
 
 

 
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