Gold-bugs, "think gold 400"
Last week was
a decent week for gold, and I want to show you what the daily
chart of gold looks like. What we see here is a "head-and-shoulders
On Friday August gold gapped up above its 50-day moving average (391.90) -- to close at 395.70. That was impressive action. In order to break out of its head-and-shoulders bottom pattern, August gold would have to closed above 400. I would not be shocked if that was to happen next week.
As for gold stocks, they've taken a beating, and they are now gun-shy or I should say "gold-shy." By this I mean that the gold shares want to see gold actually close at 400. And just as important -- remain above 400. In other words, the gold shares are now from Missouri. They're saying to gold, "SHOW ME." I suspect that very shortly gold will show them by moving above 400 and staying there.
By the way, the 200-day moving average for gold stands at 398.60. Thus, a price of 400 for gold would not only break the metal out of its head-and-shoulder bottom, but it would take gold above its important 200-day moving average.
"think gold 400."
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