Gold: Turning Short Term Bullish

We are turning back to bullish on gold after having turned bearish July 25th at the close (see calls here). Gold ETF GLD is charging to its higher-downtrend. If it can hold at a close higher than that downtrend it will be an added confirmation of this bull move.

Here's The Chart

You have two trends, one from above coming down and one from below moving up. One of them is going to break. For now the upside looks like it has momentum and can break that downtrend which would be bullish.

(Click on image to enlarge)

Source: Interactive Brokers. Gold GLD ETF

Fundamental Factors Still Driving Gold

CPI has been low. The US Fed's favorite inflation indicator PCE-Price reports tomorrow morning. Inflation is working a little bit backwards on gold right now. Low inflation means the Fed may be forced to hold back further rate hikes. That allows gold and inflation to rise down the road.

Elsewhere you have a tough war of words against China and North Korea from the US and aggressive actions from Russia against the US.

Geopolitical risk building usually helps gold prices.

Wrapping It Up

While we are still very bullish on equity markets, gold looks like it can continue to move higher.