Gold About to Rally Hard?

In my last post on Kentor Gold I mentioned that I would post about my current thoughts on gold. Well as you would know I posted a chart the other day that showed gold had broken below the ascending triangle pattern that had been forming. As a result I thought there was a chance that it could head lower and perhaps even touch the lower band of the long running uptrend which stood at $1,500 per ounce.

However, this can now be classified as a false break in my opinion, with Gold rallying hard over the last couple of days (up well over $100 per ounce). It has now broken to the upside and out of the upper band of the long running channel. As a result we may be about to see another strong move to the upside.

Anyway I posted a video on youtube which explains my thoughts more clearly so please feel free to check it out.

Gold: Is It Heading Lower?

You guys know I am not a massive fan of charts, but I do take a look at them from time to time and one area where I have had some success is charting gold and silver. For some reason they seem to respect support/resistance and the bands of up trends/down trends quiet nicely. I don't post many of these calls on this blog, but if you are interested you can check on my youtube channel.

Any way I thought I would post a chart today because gold has been moving in this triangular or wedge shaped patten for the last couple of weeks. This has been characterised by higher lows and the inability for gold to break out of the upper band of its long running up trend around $1,700. In last nights session it broke to the downside which suggests to me that its low of around $1,530 may be tested or alternatively the lower band around $1,500.

If gold can then bounce strongly off this lower band then I think it will be very positive as it will have confirmed that the long term up trend remains in tact (from a technical view) and it can then continue its long sustained run up without getting ahead of itself and going parabolic.

Why is this important for me? When I own one gold stock at the moment, KGL, and have a close eye on a couple of others. A short term drop in the price of gold could result in some weakness in the share price providing a good opportunity to enter certain stocks.

Please let us know your thoughts and as always please do your own research and consult a licenced financial advisor.

Is Gold on the Verge?

Yesterday I posted a video on Youtube outlining my thoughts on gold. Based on the price action that we had witnessed over the last couple of sessions I thought that one of two scenarios could play out:

1.    That a new uptrend was being established at a steeper angle

2.    That gold had formed a double top and was likely to pull back and consolidate between $1,750 - $1,850 (bullish target) or within the previous channel, $1,500 - $1,650 (bearish target).

Below is a copy of the chart that was contained in yesterday’s video:

Last night’s action was reflective of my earlier analysis as we did see further weakness in the price of gold. As the new chart below shows the price gold dropped down to the new trend line that I had previously mentioned. The lower wick indicates that it did fall below the trend line during the session, however, what is important is that it closed pretty much smack bang on it. As a result of this we now need to see a green candle for this new uptrend to continue. If we see further weakness in the price of gold tonight then the uptrend will have broken down and gold will head lower in my opinion. This then brings my second scenario into play and could result in consolidation between the two price levels outlined above.

Finally I don’t think either consolidation scenario would be particularly bad for gold in the long term. My initial video that I posted a number of weeks back discussed how a parabolic move is not an ideal scenario for anyone who is invested in gold for the long term. If gold was to move back into its original channel then the long term uptrend could continue for a considerable amount of time.

See my new video based on last nights price action here.

Disclaimer: The above is not advice, just some general thoughts. Please do your own research and consult a licenced financial advisor.