Over the last two years, Gold has traded in this massive compressing wedge pattern at a major pivot level. Momentum has significantly improved and seems like a bullish turn of events. This could be a strong rally setting up to work off long term oversold conditions.
A closer look at the long term support area and momentum improvement.
The weekly bollinger bands are quire compressed as well as noted below. Low levels like these tend to suggest there is energy in the market for a directional move.
No doubt there is a lot of work for bulls to do yet, specifically clear the 40 week moving average.
Two questions I'll leave you with:
- Since optimism has reigned why has Gold not made new lows?
- Why didn't gold make a new low as the dollar made a new high in March?
Trade 'em well!
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