Gold Breakout Pattern To Watch For
I received the following today from Robert Mish, the 50-year veteran bullion dealer we’ve interviewed on this site in the past.
Thought the group here would appreciate his seasoned perspective:
If this move in Gold is for real, the following is a common technical pattern to happen in sequence:
- gold breaks out over former R at $1111 (happened)
- gold gets ST overbought (happened)
- gold corrects to test the breakout level (happened this morning)
- gold rallies higher than prior, testing the 200 day moving average (now around $1135)
- gold consolidates at or slightly above the 200DMA then runs higher again.
- gold works it way to major resistance wherebreakthroughs cause short funds to exit ($1180, $1225 then $1300 areas), and breaks out again, triggering a big run.
- selling dries up on dips thereafter as gold climbs a “wall of worry” in a new bull market
A gold close back under 1111, especially under 1100 suggests that it is still not time yet for a gold bull move.
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