Gold Faces A Key Test

February Gold did everything we asked of it on Friday, clearing the way for a push to the 1226.90 target given here earlier. As always, a move that easily exceeds the target, in this case by perhaps $2-$3, would affirm the robustness of the rally and the likelihood that it will continue. The short-term outlook would brighten even more if bulls can surpass mid-November’s 1236.10 ‘external’ peak (see inset), especially if they achieve this feat without taking a noticeable breather.

The futures finished toward the middle of their range on Friday, suggesting that buyers were not exactly chomping at the bit.  My hunch is that a slow start Sunday night would be more constructive than a leap that could attract unwanted multitudes of profit-takers.

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