Monday, February 27, 2017

Gold Must Battle Through Resistance to Push Higher

Here's a chart that shows the recent action in gold, and why the yellow metal is running into overhead resistance.


You can see that a downtrend in gold that has been in place since July is overhead resistance now. This lines up with the 200-day moving average. Technically speaking that's tough sledding, and a formidable obstacle for gold to push through.

I believe gold WILL push higher, for a bunch of fundamental reasons. But it could take some time. The recent action in gold miners is telling us that. Gold miners sold off last week even as gold went higher. This shows that traders were ready to take profits.

With the trend indicators, solidly bullish, here's what I would do. Wait and see if gold can pull back to the mid-point of its Bollinger Band (that blue dotted line that the price action touches every now and then). That might be a good time to buy.

If you like the gold equities, remember: They've been turning higher AHEAD of gold itself. Just as miners lead on the way down, they lead on the way up.

Good luck and good trades.

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