It seems like we've been here before, but make no mistake, this moment is unique and potentially crucial for the long term path of the gold price. Since crashing down from the mid $1500s in April 2013 gold has spent the last five years carving out a massive long term bottom. It is this broad based bottom which has the yellow metal on the cusp of greatness once again:
Gold (Daily - 6 Years)
Since rallying from $1045 in December 2015 to $1377 in July 2016 gold has been trading within a narrowing range amidst a series of lower highs and higher lows. A resolution seems close at hand, and the bullish scenario would see a snapping of the streak of lower highs (above $1360), followed by a breakout into the $1400s; which would leave gold in a volume-by-price vacuum which extends all the way up to the open gap from April 2013 at $1560.50.
The bearish scenario would see a drift lower back to test major support and the rising 200-day moving average near $1275-$1280. Such a scenario may inevitably lead to the upward breakout over $1400, however, it will simply take more time and require more volatility (shaking out of weak hands).
From my vantage point I can't recall seeing gold in such a bullish spot technically while sentiment was still relatively muted. The strongest bull moves don't give buyers many chances to buy on dips so we should know which scenario gold will be following fairly soon.
To find out how @Goldfinger is trading gold, gold mining shares, and individual stocks and ETFs sign up for the Trading Lab today!
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.