Gold 4 Ways

Gold has staged a great goal line defense the last 3 months. Is it time for a major move? Let’s take a look...

The daily chart can be interpreted as an ascending triangle with a top at 1630 and a target on a breakout higher to 1735. But the Relative Strength Index (RSI) is struggling to turn bullish and the Moving Average Convergence Divergence indicator (MACD) is moving back towards a cross to negative.

These are not favorable signs. Moving out to the weekly perspective shows shows that the long downtrending channel is still in tact despite the continued move sideways and drift higher. In fact there is still room to move higher without jeopardizing the channel. But notice that the Bollinger bands are getting very tight. The last time they were this tight the price moved from 1470 to over 1900. A closer look also reveals that the RSI is trending slowly higher and the MACD has crossed to positive.

Along with this the 100 week Simple Moving Average (SMA) is rising and acting as support. A bit brighter in this time frame. Another step further out to the monthly chart shows a solid support at 1550. With a rising 50 month SMA pushing it higher but a RSI that is hanging on to the bullish territory and a MACD that is continuing to grow more negative.

Look out below 1550 on this time frame. The final arbiter, the 3-box reversal Point and Figure Chart, shows a very bullish price objective of 1780. This gives the bias to the long side but it is hard to jump on board until it clears 1640.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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