Gold Market Update
The risk of a major terrorist attack between now and the US elections on 2nd November is considerable, as such an event would assure a victory for the Republicans by a considerable margin. Should this happen gold will blast through the resistance at $430 before you have time to scratch your ankle. Otherwise gold is waiting for the next decisive move by the dollar. The technical picture has improved since the last update with a successful test of the lower trendline of the gentle uptrend that started in May. The uptrend is gentle because it is occurring within a trading range bounded by the highs earlier in the year at $430.
The 3-year chart reveals that the picture remains one of indecision with the price corralled between rising long-term trendline support and the strong resistance level towards $430. The dollar is now trading quietly in a narrow range within the confines of a symmetrical triangle formation, which, it is interesting to observe, it must break out of by the end of October / early November at the latest. This type of triangle can break either way. So we can expect to see a breakout by both the dollar and gold by, you guessed it, the time of the election or immediately after.
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