Gold To Fall By 50%

Courtesy of Abigail F. Doolittle, Peak Theories Research

Abigail F. Doolittle, of Peak Theories Research, comments about potential volatility in the Gold market due to recent and future Fed actions and debt dramas. Please enjoy Doolittle’s “The Weekly Peak-September 16th, 2011″

In summary:

-Gold’s long-term monthly chart is showing a major and bearish Rising Wedge pattern with a target range of $555 to $1,045 per ounce.

-This pattern seems to reflect investor anticipation over an ever-weakening dollar driven by the by the Fed and the debt drama in the US.

-However, gold’s near-term uptrend recently reversed and this suggests that investors may believe that the Fed will not be weakening the dollar any time soon.

-In fact, one possible policy step to be announced from next week’s FOMC meeting is “Operation Twist” and something that might boost the buck.

-Perhaps it is this possibility that has caused gold to trade into a Diamond Top that carries a target of $1,600 per ounce.

-It would be a decline toward that target and gold’s 150 DMA near its QE2 trendline that could kick gold’s Rising Wedge into corrective action.

“The Weekly Peak-September 16th, 2011″

Click here to learn more about John’s book and for a free membership to Wall Street Sector Selector