Eoin Treacy's view Gold hit an accelerated peak near $1921 in September 2011 amid speculation that significantly higher prices were imminent and has spent more than a year consolidating the earlier advance. Much of that time has been spent ranging between $1525 and $1800. Gold surged towards the upper boundary from mid August and encountered at least short-term resistance near $1800 by early October. It has since retraced approximately half that portion of the advance and at least partially unwound the short-term overbought condition relative to the 200-day MA in the process.

Gold has at least stabilised near $1700 and a sustained move below the 200-day MA, currently near $1660 would be required to question potential for supporting building to take place in this area with a view to higher prices over the short to medium term.

As I mentioned in last night's Subscriber's Audio, I participate in a radio discussion during an hour long show for TodayFM once a month which focuses on the financial markets. I have been doing this for quite a while and the podcasts are available here. As with anyone else I have my good calls and my bad calls but no one has ever phoned in to complain until last Sunday.

The last time I appeared on the show was in late August and I expressed the opinion that precious metals and particularly platinum were about to move higher. I missed the late September discussion because I was travelling to the USA. The caller last Sunday was complaining that I had been wrong because gold prices had come down. Regardless of the fact that gold had initially gone up more than it subsequently fell, the caller was expressing frustration with the recent decline and the obvious pressure this was putting on his finances. I wonder whether this might be seen as a contrary indicator since it reflects the fact that the speculative optimism has been squeezed out of the market.

Silver has stabilised around $32, platinum has stabilised near $1550 and palladium has stabilised near $600. Sustained moves below their recent lows would be required to question current scope for some additional short covering.