Gold nearing major break out

Say the word Gold and everybody has a reaction. Some think of polished shiny jewelry, a necklace, bracelet or ring. Others see rappers with a pile of it to show how rich they are and maybe a grille on their teeth. Some, especially Peter Schiff, with a market orientation think of an inflation hedge, or place to store wealth when the world is in crisis. But virtually no one thinks of a crusty old man with a scraggly beard and a pan dipping it into a creek to find little nuggets to get rich quick.

Gone are the days of the ’49ers flocking to California to stake a claim and get rich quick. Gold may have a different story to tell though. It is sitting at a major resistance zone and prepping for a break out. Maybe it is once again a time to get rich quick with Gold. Take a look.

Gold bottomed in December after a drop from a high 6 months earlier and then started higher. It paused in January after retracing 38.2% of the move lower, but only for a week or so. Another leg higher touched the 200 day SMA and it pulled back again. A third leg higher in March hit 1300 by early April and Gold stalled once more. Since then it has oscillated in a range from about 1200 to 1300.

Today it is pounding on the ceiling at 1300 again. Momentum is bullish with the RSI churning over 60 and the MACD rising. And the Bollinger Bands® are shifted to the upside, to allow continuation higher. Above 1300 the next level of interest would be 1319, a 78.6% retracement of the down leg and then 1345, prior resistance and a 88.6% retracement. Your clue will be a push and hold over 1300, especially on a weekly basis. Failure to do so and a move back under 1275 could signal this is just another oscillation and Gold is about to return to the 1200 area.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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