CLICK ON CHART TO ENLARGE
Since the peak in 2011, Gold remains in a downtrend, creating a series of lower high and lower lows.
Gold’s rally in 2016 is attempting to break this 5-year falling trend, as it is attempting to break a series of lower highs.
Over the past 6-months, Gold could be creating a rising wedge pattern. This pattern two-thirds of the time, suggests lower prices are ahead.
If history is to come true per this pattern, support needs to be taken out at (1) above. If support does give way, selling pressure could increase.
The pattern in the US$ looks almost the polar opposite (bullish falling wedge resistance test in play).
Should Gold break above triple resistance, it would send a message that the multi-year downtrend is changing.
What happens at (1), support break or resistance breakout, should send an important message for Gold going forward over the next few months.
If you would like to receive regular updates in this sector, we would be honored if you were a Premium or Metals Members.
I’d like to sign up for the trial premium membership.
“The Law of The Golden Hamburger.”
Historically, gold used to be 100X the cost of a deluxe hamburger. When gold was around $50/ounce, a deluxe hamburger was about 50-cents. When gold went up to $250/ounce the price of a hamburger was about $2.50.
With gold over $1,000, this law was bollixed by extreme national debt and a fear & loathing that parked itself into the creases of the national consciousness when it should’ve been in our guts. Yes, The Law of The Golden Hamburger has been out of whack for quite a while now, it will eventually return there.
With a deluxe hamburger around $5.00 today (my post lunch SWAG estimate for the moment), gold should head down to $500/ounce.
The only thing that could eff-up all of that? If the price of a deluxe hamburger goes up to $10.00! Perish the thought…