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Gold Pattern Changing Right Before Our Eyes

Commentaries & Views

In the movie Trading Places, Billy Ray Valentine said to the Duke Brothers: “They panicking out there; I can feel it.” I can’t say that gold shorts are panicking quite yet, but I can see a change in the pattern and with all the negativity that has surrounded gold since the highs on Feb. 19, the bottoms may finally be in.

For the last couple of weeks, we have watched gold try to break out to the downside and were looking for $1,240, but the $1,270 level has held, and the shorts appear concerned. For past four to five days, gold has made higher lows within the consolidation pattern and this morning is breaking out to the upside.

A close above $1,300 would be a sign the bottoms are in and gold would become a buy. This should be no surprise; we constantly remind traders and investors that eventually consolidation ends, and a breakout will occur. Gold looks to be breaking out to the upside. The next couple of days will confirm whether we are breaking out or stay in congestion.

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