With minimal upside guidance this far into record territory, investors will be watching for signs of broad market stability (predominantly in the currency and equity markets) to move back out of gold, while speculators and short term traders are eyeing the inflation-adjusted high of $2,250 per ounce set back in 1980 (the previous longstanding nominal high of $850 per ounce).

Friday's peak and resulting sell-off set up a shorter term pattern for possible guidance in the week ahead. The top set a new resistance level for a Channel Up chart pattern, illustrated here on the 30-minute time interval. The current price places the market squarely in the middle of the channel at $1,650 per ounce, with support at $1,820 which will likely be retested if the stock market firms in Monday's trade.

Volatility in the price of gold is foregone conclusion for now, as profit taking, short-squeezing, and the overall sense of anxiety amongst investors leaves much room on both the upside and downside. This is clearly represented by the 60-dollar range inside the relatively short term Channel Up pattern.

While a correction is always possible, the recent sell-offs in gold have found rapid retracements back to new highs, and thus until a definitive top has been made, buying pullbacks may prove to be the best course of action. If a recovery in stocks carries the price back to the $1,820 support level, traders will be watching for the market to hold there for entering or re-entering long positions. A successful retest of this level would invite a new high over $1,900 to challenge the top of the channel again.

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