Is Gold Set For A Dramatic Fall?

The recent rally in gold which touched a near 6-month high is unlikely to last. As per the short-term analysis based on 6 months time frame, GOLD has a strong strong resistance at $1704 which is also an best short level for short-term positional traders .

Fundamentally speaking gold has had a bull run over the past one month rising 5.5% based on expectations of monetary easing by both the Federal Reserve the ECB. But as I had mentioned eatlier, that its just an euphoria of QE3 due to lack of clarity by policy makers .

I repeat once again for traders that i had clearly mentioned QE3 is just expectation but not justified ... And trend cycle , price had to retrace the all-time high $1924 and the crowd was looking for an opinion... The rumours coincided which fueled the recent rally.

But on the same day I said that once $1704 is achieved ...One or the other events pops or coincides and that would lead to a "DRAMATIC DOWN TURN" of the trend in GOLD towards our pending downside targets.

So what's ahead? Is it show time ? Yes maybe today, Thursday, September 6, 2012 is the day which most of Big Boys are waiting for to swap the profits of new money and novice traders who have made profits in the last few months ...

REVERSAL FACTOR: "CENTRAL BANK OUTCOME"

ECB is scheduled to meet today and the Fed next week...If the out come of the meeting is disappointing then the fall in GOLD prices will happen quickly. There are also lot more factors and opportunities For market disappointment over the next couple of days ...And when the prices need to fall whatever the news is markets take it as NEGATIVE & WE CAN ASSUME THAT CENTRAL BANK MEETING OUT COME WILL BE A DISAPPOINTMENT AS THE CORRECTION IN PRICES IS MUCH NEEDED after its bull run over the past one month rising 5.5%.

We expect GOLD to fall around 10% in the days ahead...

TRADING LEVELS

GOLD STRONG RESISTANCE and BEST SHORT LEVEL and 1704 STOP LOSS SHOULD BE KEPT ABOVE 1746 , DOWNSIDE TARGET IS at 1628-1612; ONCE CRACKS BELOW 1592 THEN NEXT TARGET IS at 1502-1462; 1426 -1365
HOWEVER OUR LONG PENDING TARGET and MAGICAL NUMBER at $1226 IS STILL ACTIVE.

LTP - 1699.05