by Alasdair MacLeod
Gold Money
This article notes that the technical situation for the gold price has sharply improved, to the evident surprise of many mainstream analysts. It discusses possible reasons behind the turnaround, and implications for the future
The technical situation is shown in the chart below.
[…] A “golden cross”, with the 55 day moving average crossing above the 200 day moving average with both of them on a rising trend, and the share price above both these moving averages, has now occurred. This is generally taken by traders to indicate the bear trend has reversed, and a bull market is now in place.
More interestingly, this change of direction is combined with a bullish pennant pattern, which commenced on 11th February and completed on 3rd March, taking precisely three weeks. This is shown by the dotted lines. The intraday price movements (not shown) conform exactly to the pattern, and the break-out on 4th March saw high volume with an increase to a record amount of outstanding Comex contracts.