"Indeed, several factors indicate the gold selloff is finally over. First, the contract closed out the holiday-shortened week with a bull hammer candle over 1100, showing that buyers are getting more aggressive. This one-bar pattern needs confirming with a subsequent bar that trades above the hammer and closes the week strongly.

In addition, weekly stochastics has now swung from an overbought to an oversold , indicating that bulls have been shaken out . Notice how gold bounced strongly the last three times it hit an oversold level, including the turn in October 2008. This suggests the contract is setting up to move higher, at least for a few weeks."