The set-up is a potential inverse head-and-shoulders pattern. RSI is a short-term momentum indicator, on the bottom of the chart. It just gave a "buy" signal this past week.
If, down the road, the inverse H&S pattern works out, this gives us a target of $1,600 on gold.
That's longer-term. Short-term, I think that we'll see gold continue to rally. I think we're going to see a test of the "neckline" of this potential inverse head-and-shoulders pattern.
Now, in Gold & Resource Trader, we've been adding positions to ride this train (in Oxford Resource Explorer, my monthly newsletter, we already held positions, as that service doesn't trade as often or as quickly). The new GRT positions are working out fine. Better than fine.
Are you too late to this gravy train? I don't think so.
The next gold futures settlement is on June 26th. We usually see gold futures sell off into the settlement (you can insert your own joke about market manipulation here) because the market makers don't want to pay off on the bullish gold call options they've been writing.
So, if we get that pullback, that should suck some wind out of gold miners. And that would be a great time to buy, if you dare.
By the way, silver is outperforming gold in this rally, as it usually does. And silver miners are on fire.
This will not be a straight-up move. And the big question is what happens around that $1,400 area. I recently gave my subscribers a long list of fundamental reasons why I think gold and silver will keep rallying for the next five to six months. Your reasons, bullish or bearish, will be your own.
Good luck, and good trades
Sean
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