I am not presently in a gold trade, but I am watching it out of interest, to see if its price falls when the markets do (as I expect them to), just as it did in February and March. My hypothesis is that the economy is attempting to deflate at the end of a very long credit cycle, and that that process was arrested by Fed intervention.
What I see on the charts is a rising wedge that has a classic overthrow. It is making subsequent higher highs in price while making lower highs on the RSI. This is a continuation of the same pattern I identified a couple of weeks ago. The same setup remains in play.
This does not mean that it cannot go up further from here in the short term, but it does mean that I expect it to correct, perhaps somewhat significantly, in the intermediate term.
Of course, we may enter a period of significant inflation in the future, and I would expect gold to soar at that time.
What I see on the charts is a rising wedge that has a classic overthrow. It is making subsequent higher highs in price while making lower highs on the RSI. This is a continuation of the same pattern I identified a couple of weeks ago. The same setup remains in play.
This does not mean that it cannot go up further from here in the short term, but it does mean that I expect it to correct, perhaps somewhat significantly, in the intermediate term.
Of course, we may enter a period of significant inflation in the future, and I would expect gold to soar at that time.
Comment:
Here is an addition to the chart that shows the classical pattern I see in the "overthrow" of the rising wedge (red). That is not a very constructive consildation, and it shows weakness. This pattern can break either way, but these break down, rather than up, more commonly.
