Gold Potentially Headed For Sharp Move Up or Down With Resolution of Symmetrical Triangle

Although there be wars and rumors of wars, very few will sway from their conviction of gold as a safe haven. Not even frantic cries of “the Russians are coming, the Russians are coming …” or “Hamas and Israel are at it again” have been enough to move the price of the shiny yellow metal. So what will it take to drive prices higher? I honestly “dunno”, but suspect that it will be some sort of black swan event that scares the devil or Jesus out of us all whenever it does occur. 

With all the above having been said, my technical analysis of gold’s weekly chart leads me to believe that we are due for a sharp move upward or downward in gold prices.  Over the last four to five years, we have gone through a bullish channel, a consolidation period after topping, and then a bearish channel.

The last pattern, which was bearish, has been broken and represents an approaching and unresolved conflict between bulls and bears in the form of a symmetrical triangle. Such patterns typically result in a sharp upward or downward move as support and resistance trend lines converge to end the game of chicken between bulls and bears. Eventually one blinks and yields to the other. On a few occasions, both blink and both abandon the battlefield to create a trendless and dull market. In the meantime, remember that chance favors he who is most prepared and one would be well advised to wait patiently until there is a bullish or bearish breakout of this symmetrical triangle.




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