Gold has been red-hot of late, raising the hopes of precious metals bulls. After several failed rallies, is Gold (NYSEARCA: GLD) finally ready to breakout?

One ratio that I like to follow to monitor precious metals is the Gold to US Dollar ratio.

As you can see in the “monthly” bar chart above, the Gold / US Dollar ratio has been trading in a multi-year narrowing pennant pattern, with support at (1) and resistance at (2).

The ratio is working on a breakout above the 8-year falling resistance line at (3).

A breakout here would be huge for precious metals bulls… and could be the start of a larger rally if it holds.

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