Hello. Morning and welcome to CantosCharts. My name is Paddy Osbour and today we're going to have a look at gold.

So again we'll start on a long-term weekly chart. We're looking back a couple of years to the end of 2008 and I think everyone knows which way gold is going in the long-term.

The question is how much further is it going to go or whether it's going to pull back very far, or what's going to happen for the next few days and couple of weeks?

Now, the situation we've got here, I've drawn a channel line. I've let this little move here squirt out the top which I don't usually do, but it was a very quick and very quickly reversed little move this up move. So I'm quite relaxed with that little squirt there. But basically you can see the situation is that this channel line, it's a very good trend line. You've got one, two, three, four, five, six touches on this trend line, so I think that's pretty well established. It has been in place for two years. It has been very steady. The gradient has been pretty much the same.

What we've had is obviously some more accelerated bursts and some pullbacks, an accelerated burst, a pullback and we've had another accelerated burst and have a guess what you think I might be thinking from this point. It's the third time it has touched the channel line in the two year period and the third time it has gone overbought in the two year period. So here this sell signal on the stochastic prompted a significant pullback. Here again we had a sell signal which prompted a pullback and here again we've got a sell signal and we've got the starting. It has just got a bit volatile in the last couple of weeks. We're not too sure. People aren't too sure where the market is going. It has come off that high above $1,400 last week and it has come off about 7 per cent I think off the high by the end of last week. It's rebounded a little bit today at the start of this week, but the question now is where do we think it's going.

In the medium-term (so I'm looking two to eight weeks) I think there is a decent chance it's going to pull-back towards the trend line. So it's going to be around the $1,250, $1,260, $1,270 level. So I think there is a significant pullback to be done. You see these ones they took eight weeks to get through, so this could be into Christmas and beyond in fact before it comes back down there. So I think we're going to get a pullback before we get a move higher.

Let's go in a little bit closer at the daily chart and we can see this lovely move up that we've had through August, September and into October. A very steady, not too violent, not too many big up and down moves - just a steady, steady buying.

Then we had some more volatility up here and at the moment this is showing some indecision because there is a lot of heavy selling through these days, some big buying, some more heavy selling, we had a little bit of buying again towards the end of last week and we've opened this week fairly steady.

The oscillator not telling us too much, but just threatening to go oversold, so giving us a potential buy signal and again here we might have the beginnings of a potential head and shoulders. This is a big one because it is from above $1,400 to around $1,330. So we've got about it's not quite $100, it's about $80 moves.

So you know if this one breaks below $1,333, or say $1,320ish, $1,320/$1,330, then I think we've got a move down easily to $1,250 which will come in with the big long-term trend line on the weekly chart.

So it really depends on the trigger here of these recent lows from last week in fact. If we can break below these - last week we saw some decent buying around $1,330, so there was support. Every time it came down here it bounced and Thursday was good. So for the moment, in the shorter term, we've got some support. If this level breaks, then I think we've obviously got this potential level, but I think if we break $1,330 we've then got a chance to get down towards $1,250 back to that major trend line.

Longer term, the demand for gold is ridiculous. China, India, everyone wants gold, so I think in the longer term, in the next year, we can easily seek $1,500, $1,600, $1,700. I know some people are talking about $2,000, possibly even that. So longer term, fine, it's going up, but as a trader you want to be sort of taking advantage of these pullbacks and I think there is a decent chance, if we break $1,330 there's a decent chance of an $80 move down. If we don't break this, if we continue to get support here like we did last week, then we stay long and we should be long already hopefully. If you're a longer term trader of gold I don't see any reason why, as in the longer term, I think over a few weeks you should not be short yet because we've still got higher lows and we're still not getting a position where the uptrend is finished.

So for the moment we should be long and staying long. Again, if it breaks above the highs at $1,400, $1,420, I think was the high, if it breaks above there, again, we want to go longer again.

We had this breakout. The last time I was on Cantos we had this slight wobble at this stage but I said we may get a pullback, but if it breaks to a new high, we go long. 'Fill your boots' I think was the expression and the same is here. Now it's much more volatile and there are a lot more bigger swings, but again, if it hits a new high it means the buyers are back in control and we could have another big step up towards $1,500.

Okay, so at the moment we're long. If it breaks below $1,330 we want to get out and get short, but otherwise long, long-term (one year view) I think we've still got a long way to go for gold to the upside.

Okay, I hope that you found that useful. My name is Paddy Osbourne. Thank you.