Six years ago this week, the Power of the Pattern noted that “Gold could be flat to down for years to come!”
Below looks at gold, silver, GDX and GDXJ since the post on 9/1/11.
Is the metal market's struggle about to end? Is that the 'mother of all bullish patterns' in play for gold? based on the chart below, It's possible.
Even though gold has been down hard the past 6 years, it did NOT break below rising support off the 2001 lows, which was tested at last year's lows. And that's a long-term positive.
Over the past couple of years, Gold could be forming a base, that is taking the shape of a “Bullish Inverse Head & Shoulders” pattern. If the read would happen to be correct, an all important test is in play at this time. The key test in play is that gold is testing the underside of the neckline, which is resistance at this time.
Bottom Line
If this read is correct and gold breaks above the neckline at (1), we could see buying pressure take place, which has been absent for years.