In technical analysis, as in most things in life, keeping it simple is often more effective. Long time readers know that I often joke about the chart guys who just love to draw 157 lines all over their charts and overlay Fibonaccis and pitchforks and whatever else they can find. From my experience this kind of charting is highly ineffective. Keep it simple stupid. 

Gold has spent several months going up, down, and all around with little to show for itself in terms of net price change. However, in the last couple of weeks gold in USD terms has significantly improved its chart structure:

Gold (Daily)

The candlestick pattern formed since May 17th (large bullish candlestick followed by consolidation followed by large bodied continuation candlestick) is quite bullish and on the brink of negating the potential head & shoulders pattern that many had been focused on recently. I also really like to see the Daily-RSI(14) near 60 (where it is now) as price begins to break higher. 

We could talk about flat 200-day moving averages and all sorts of other things, the fact is that by the time the 200-day moving average is turning upward gold could be well above $1300. The 200-day moving average is a trailing technical indicator, after all it is simply the average price of the last 200 closes. It tells us that gold hasn't been doing much of anything for a while; potentially building energy for the next directional move. 

The trend of higher lows from the December 2016 low at $1124.30 is firmly intact and gold is on the brink of what could be a powerful next leg higher which could easily test the major confluence between the April high ($1297) and major long term support/resistance ($1310).

One final thought is that articles such as this one by Mark Hulbert "Gold bulls can expect more bad luck" are quite curious. I'm not sure who Hulbert includes in his sentiment analysis but they are not the guys that I watch! I have seen long time gold bulls turn bearish in the last couple of months, and many gold sector commentators who actually profit from a bullish gold price also turn bearish! This is not excessively bullish gold sentiment by any means. 

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