Gold Futures (U.S. $543.50)

In mid-December 05 I said I wanted at least a pause in the $500 area before moving higher. We paused for a week there, and then spiked upward to exceed $550 before setting back.

This now has the look of an intermediate term top formation in a long term uptrend as I see it. If I'm right about this, it will be the sixth spike top we have made since 2001, and in every earlier case, the correction has lasted two months or more.

I've said that the long term uptrend has the energy of a freight train running at full throttle, so I hesitate to speculate on even a modest correction, but my work suggests the $550 area could be an important intermediate term stopping off point, so I'm stuck having to write it down.

I said earlier that it would be surprising if we soared through $500 without even a pause, and since then we have returned to $500 once. Another intermediate term setback to the $500 area would make sense to me now. It might set the stage for more good news over the longer term. The long term trading pattern still looks like a freight train running at full throttle.