Gold is trading in the upper part of the channel (see chart below) and it tested the upper line on Thursday. We are cautious on the short term forecast, because gold will find strong resistance at its all time high. We expect this commodity to continue its trend higher in the next months going through mid next year due to a weaker dollar and a massive US deficit. Central Banks all around the world will sell some of their USD reserves to buy billions over concerns on US massive deficit. However we forecast it will pull back by end of November towards 1060 to regain strength in December to close the year at new highs. We have noticed that Gold moved similarly in November/December of past 4 years and we forecast to see the same pattern soon. However there are many factors that can make it different this year, most important, gold is more crowded than past years and more “emotional”.