Gold has been forming something like a reverse flag pattern where the flag actually points the same direction as the flag pole, or in other words price rapidly fell and the flag is in a descending angle as well. These types of patterns can actually be bullish reversal signals. The flag is descending into a support area and could cause a sharp direction move as price attempts to break out. I would want to enter on a bullish breakout of the flag.
@marketdiverfx, I haven't taken it yet but I may if price plays out the right way. I am already long the Aussie so I have some gold exposure. I think they have a correlation of about 0.4 to 0.5 right now.
krugman25
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@krugman25, Also looks like a head and shoulders with a descending slant, also pretty bullish
marketdiverfx
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@krugman25, That's true, good idea to wait or let the Aussie play out.
krugman25
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@marketdiverfx, I always have this feeling that the market will do a fake-break, crash hard below the support line and then make an epic comeback and break back above. If that happens I will for sure be in, even with the extra exposure.
marketdiverfx
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@krugman25, Gold does that all the time, it's a spike out market.
marketdiverfx
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@krugman25, When it runs in the intended direction pay off can be big though, 50/50.