It is no coincidence that the next and probably the most highly anticipated Euro-zone Summit is scheduled right in the timeframe for a low in the 5.5 month (122 day) cycle in spot gold prices.

Within a cycle of such length, the bottoming window is 7 days in an imperfect cyclical world, which means that gold already may have bottomed.

If not, then there still remains risk of a negative reacton to the Euro-zone Summit plan, which could send gold into another nosedive next week. That said, gold has climbed $45 off of Tuesday's pivot low at $1701.98, a rally that exhibits bullish form, which if accurate provides clues that a new upleg could be in progress.

In addition, the strength has emerged right within the apex of a 4-month triangle that has the right look of a bullish continuation pattern. If that proves correct -- and the triangle digestion period is complete -- ACCOMPANIED BY A 5.5 MONTH CYCLE LOW -- then gold prices could be in for an extremely powerful advance that should hurdle prior rally peaks at $1759.70 and $1803.30 on the way to revisit the September high at $1921.50.

As long as the 12/06 pivot low at $1701.98 remains intact, I have to go with an emerging bullish scenario for gold and the SPDR Gold Shares (GLD).

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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