I titled my weekend post Gold edges higher but yet to declare its hand. While it's true that the cards remain well hidden until the key levels in that post are breached (May low and June high), let me stretch the metaphor further, and suggest that the facial expression and body language are giving us a few hints.
Firstly, the weekly candlestick chart of Gold from late 2007 shows that Gold has repeatedly tested and respected the trend line drawn from the 2008 and 2009 highs. So long as support around that line continues to hold, Gold should eventually launch upwards away from the line. The second bullish indicator on the chart is that Gold shows a clear bullish momentum divergence in to the recent lows. I use MACDH as a momentum indicator.
The second chart zooms in to the past 18 months, and shows Gold bullishly breaking upwards through the trend line drawn from the late February high. I have shown the same trend line many times on daily candlestick charts, but this weekly candlestick chart shows the trend line break with greater clarity.
Monday, 18 June 2012
On the weekend I wrote that the S&P 500 is in the driver's seat when it comes to global equities, and the DAX is a very vocal back seat driver. We better hope I didn't get their roles back-to-front.