Since bottoming out at below $700, gold prices have mounted a significant rally, rising over 42% to $1000/ounce. As for whether this impressive performance will continue, we are still looking for the technicals to give us a clear signal.
Mostly we try and point out key turning points with our technical analysis, but it is also important to notice when there are no clear signals and one must just sit on one’s hands and be patient. This is one of those times.
Gold prices have been in a solid uptrend channel since the October lows, but in recent price action we are seeing the yellow metal drift south to test the lower support of this channel. We see the RSI in the middle ground, and with the STO turning up from the oversold area, we need a bullish crossover on the MACD to ensure that gold won't break down out of its channel.
A break down out of the channel would signal another great buying opportunity, and we will try to cover this in more detail if/when this happens.
Seeing a “golden cross” on the MACD would signal to us that gold prices are going to climb back up over $1000 in the short term, heading towards the upper boundary of its up channel.
As a guesstimate we could see gold prices staying within its channel over the next couple of weeks, making gains that will take it over $1000 again, toward the upper channel boundary, before suffering a correction a month or two from now. However, we are awaiting the technical signals before taking any action.
Until then, sit tight and stay calm.
For our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, please click on the links.