Consolidation to Breakout

 Observations

  • For the last 10 years the price of Gold has been in a squeeze (Fig. 1), technically between 2 larger trend lines.
  • The same can be seen in the shorter time-frame (Fig. 2).
  • There appears to be some resistance around $1260/oz.
  • Eventually there will be a breakout to the upside or downside.
  • GOLD: Fundamentals and environment support the argument to the upside in which case the $1300/oz level will be the next target following by $1360/oz. Contributing factors are a weak dollar and inverse relationship as highlighted in the post: Gold’s Correlations with the U.S. dollar.
  • The Mining Sector (Fig. 3) also shows similar consolidation with support at $21 on the Gold Miners ETF. With 3 times being supported at this level, once the downtrend line is broken the next level will be the $25 area.

 

Fig. 1 - 2017-08-04 Gold Long View Consolidation (Source: TradingView.com)

Fig. 1 – 2017-08-04 Gold Long-Term View Consolidation (Source: TradingView.com)

 

Fig. 2 – 2017-08-04 Gold Short-Term View Consolidation (Source: TradingView.com)

 

Fig. 3 – 2017-08-04 Gold Miners Short-Term View Consolidation (Source: TradingView.com)

 

 

Best,
Michael

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