What does Fibonacci analysis predict for Comex gold over the coming year? We recently heard from a skillful practitioner of the dark arts, “Mestre Socrates,” who sees $1490 an ounce by around next May. But there’s a chance the path will not be smooth, he cautions, since prices could first dip as low as $1012 – more than $100 beneath current levels. That would represent a great buying opportunity, however, according to Socrates – a place where bulls could back up the truck. How confident is he? Socrates notes that gold’s long-term price movements have been precisely foreseeable on the basis of Fibonacci sequences that have traced out cup-and-handle formations. “Gold appears to have a predictable trading pattern of a new high, a slam down to the previous Fib level, reworking back to the previous high, a dull six-month ‘handle formation’ period, and then a two or three-month rally to a new Fib level. This has given workable projections for the comex gold price years in advance.” Socrates studied Fib numbers a decade ago with Larry Pesavento, a well-known technical analyst. “One of Larry’s ‘big ideas,’ ” he notes, “was the particular significance of the 0.786 level, which marked the transition from a simple retracement to a primary bull trend. Furthermore, once breached, a price could take out the 1.00 level and go straight to 1.272. The last major hurdle was to break through the 1.618 level and then ‘the sky was the limit.’ This applied to any financial instrument.” No Mere Oscillation So how does it apply to gold? Socrates provided a detailed account of bullion’s ups and downs from 2003 forward, noting breakouts and cup-and-handle patterns that played out over periods as long as 18 months. To bring the forecast up to date, the recent move down from
LATEST TRADES
