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Tuesday
Sep012009
Gold: Watch This Wedge
With technical indicators such as the MACD, STO and RSI fairly neutral, gold is at a crossroads. The chart below shows how gold prices are in a large wedge formation, going back a good six months.
This wedge formation is what we will be watching very closely over the next few trading sessions for signs of a breakout. As of yet we are not totally sure which way gold will go. Our gut says up and out, but there is a possibility that we could see a sharp drop down before gold embarks on a massive rally over the next few months.
If gold breaks up and out of this wedge formation, it will certainly be a very bullish sign, however the real hurdle lies just above $1000. Sure, a break up and out will produce a fifty dollar rally and maybe a 20% gain in gold stocks which is all well and good, but the for the real substantial gains to be made gold prices need to make a new all time high. When this happens we think that gold prices will swiftly move to $1200, en route to $1500 and then $2000.
This is the mega move we are trying to get best positioned for, as this is where fortunes will be made. We see this move happening within the next two months and will possibly be coupled with the end of this bear market rally in the broader equity markets.
So its a good idea to have a core long position on gold, and look to add to this on dips and when possible trading opportunities arise.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.
For those readers who are also interested in the nuclear power sector that is currently coming back to life, you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.
This wedge formation is what we will be watching very closely over the next few trading sessions for signs of a breakout. As of yet we are not totally sure which way gold will go. Our gut says up and out, but there is a possibility that we could see a sharp drop down before gold embarks on a massive rally over the next few months.
If gold breaks up and out of this wedge formation, it will certainly be a very bullish sign, however the real hurdle lies just above $1000. Sure, a break up and out will produce a fifty dollar rally and maybe a 20% gain in gold stocks which is all well and good, but the for the real substantial gains to be made gold prices need to make a new all time high. When this happens we think that gold prices will swiftly move to $1200, en route to $1500 and then $2000.
This is the mega move we are trying to get best positioned for, as this is where fortunes will be made. We see this move happening within the next two months and will possibly be coupled with the end of this bear market rally in the broader equity markets.
So its a good idea to have a core long position on gold, and look to add to this on dips and when possible trading opportunities arise.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.
For those readers who are also interested in the nuclear power sector that is currently coming back to life, you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.
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Gold
Gold
Reader Comments (7)
The article says that a rise in the gold price "will possibly be coupled with the end of this bear market rally in the broader equity market."
Question: Wouldn't gold and gold stocks decrease in price with an equity sell off, like last fall, at least initially?
This may help put US Fed statements in a more correct light.
"The Fact that our economical models at The Fed, the best in the world, have been wrong for fourteen straight quarters, does not mean they will not be right in the fifteenth quarter."-- Alan Greenspan
yep, watch it. keep your stop tight. i think the break down could be going from thursday evening sep 3 into friday sep 4, and next week, we are going close at 850
Gentlemen, look at the weekly chart also. There´s a bearish signal coming, double top I beleive. I´d better shorten. Best regards, Toni
looks like wedge just got broken.
regards
activeintl
looks like wedge just got broken
fari,
this article was posted in September 2009.