Gold – Resuming a Long-Term Uptrend?

By Carl Swenlin, Decision Point

On the weekly chart below, we can see that, after making a new, all-time high back in August of 2011, gold went into a correction/consolidation mode, ultimately forming a descending triangle. While this formation suggests lower prices (the flat line is the weakest), price broke up through the top of the triangle. After a breakout the technical expectation is for price to pull back toward the line, which it did enthusiastically.

After testing that support, price has reversed upward, and this week made a strong move upward, signalling that the rally that began this summer is probably resuming. The weekly PMO (Price Momentum Oscillator) turned up again, which is a very positive sign.

Conclusion: Gold has completed its post-breakout pullback and appears to be resuming its long-term advance, but this will not be “official” until the October top is exceeded. It needs to overcome resistance in the area of 1800, and finally the resistance at the all-time high around 1900.

As of 8/8/2012 Gold is on a Trend Model BUY signal.

 

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  • http://www.dowtheoryinvestment.com Manuel Blay

    There is another technical positive for the gold market (and silver). On August 22, 2012 a primary bull market signal was signaled for both precious metals. Such primary bull markets tend to last many months and even 1-2 years. The current secondary reaction is becoming “old” and the odds favor a continuance of the primary bullish trend.

    Regards.

  • Alberto

    Gold is still in a bull market because interest rates are negative in all major economic countries (in Japan not yet but something is changing there). When this will change I don’t know but there will be many signals well ahead. I’m not a goldbug, I’m completely agnostic, I just want to make some money for me and my clients with a reasonable risk and the first rule is not to miss a secular bull market and gold is one of this rare events. Who missed one the most important bull market of the last 15 years should not manage money professionally (the other two were/are treasuries and EM debt).

  • Aar Bee

    If that red trendline is drawn correctly, joining all low points throughout this rally, you will see that the trend has been broken long time ago and this current rally has ‘re tested’ that trend line and is headed lower!

    Just another way to look at the same chart.