KITCO NEWS – As gold corrects from gains seen earlier in the week, technical analyst Gary Wagner said he is enthused about the market. ‘I’m excited about what we’ll see over the next month or so,’ he told Kitco News Thursday. As of 10:06 a.m. EDT, December gold was down $7 to $1,116.60 an ounce after it previously closed higher for five business days in a row. When asked if gold can see continued strength, Wagner said the outcome will be heavily fixed on the next move by the Chinese government. Earlier in the week, the People’s Bank of China devalued the yuan to help the country’s flagging economy. ‘If we see an extended intervention by the central bank in China, we could sees an extended and prolonged rally in gold and U.S. debt instruments,’ he explained. With volatility in the gold market this week, Wagner said he is now eyeing new technical levels. ‘We’ve got a pretty critical level at $1,109…I believe that is support. In terms of resistance, short term the next key level runs at around $1,132,’ he said. Over the longer term, he noted that the key level lies at the 61% retracement level from gold’s rally from about $700 to its 2011 peak of around $1,900, which lies at $1,156. ‘When we broke that [level], that’s when gold turned extremely bearish,’ he said. ‘We would really need to see, on a technical basis, a closing price at or above that price point to really get bullish on the market longer term.’
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