Wednesday, August 22, 2012

Gold breaking out


The price of gold has been in a multi-year uptrend that began back in the early 2000s. Over the past year or so, it has been mired in a descending triangle that I have been looking to break to the upside. Triangles are generally very bullish continuation patterns (yeah, I know theory says that descending triangles are bearish, I don't think this is the case).

Key price support is reflected on the chart in the u$s1525/u$s1550 area while the most difficult resistance lately has been from u$s1630/u$s1645. Over the past few trading sessions, gold has caught fire and cleared resistance. On Wednesday, gold finished at its highest level since early May. I believe this latest move higher in gold is likely to continue in the foreseeable future.