I’m on BNN today at 1:00. One of the questions that I know I will get is regarding gold. Its always something people want to know about. So- I’ve taken the liberty to post the same chart that I have been posting on my blog for the better part of 3 years. Interestingly, the support/resistance lines – which I drew ages ago- have been exceedingly consistent in determining where gold will rally off of or find resistance at.
My comments back a couple of months ago on this blog site were that gold looked like it was at a moment of truth. That is, it was playing with technical resistance at or around the mid $1300’s. I noted that it would only be bullish if it broke that price point, and preferably blew over $1400. My other comment was that time was working against that to happen. The seasonal period for strength in gold ends in October–as I wrote in this blog in early September.
Well, gold tested and failed right at the mid-$1300 resistance line that I’ve had on this chart. As I said, amazingly consistent. BTW, the gold producers, as seen via the shares Global Gold ETF, are not looking any more bullish. That ETF has been suck in a large symmetrical triangle since early 2016. Sure, it could break out to the upside – which would imply a bullish outlook. But that would depend to a good degree on bullion’s behavior.
Technical support comes in at around $1175 for gold – its currently around $1300. Now that its entered into a less seasonally favourable part of the year, it just may get there ($1175) before next summer and/or float between $1175 support to $1350 resistance. I’d not especially be a bull on gold, or the gold producers right now given that potential.