Gold Price Action On Edge Of A Breakout

Over the last few years whenever gold approaches the $1360 level, the price action gets a little volatile…perhaps even violent. One day the short-term model supports an upside breakout – the next day a failure. It’s like two heavyweight boxers going at it. You know somebody’s going to take a nap, but you’re not sure who. Punch after punch they brawl until only one remains standing. That’s gold when it approaches $1360; the Bulls and the Bears fight it out like heavyweight contenders.

As I explained earlier in the week, several individual mining companies and ETF’s are on the edge of a potential breakout. It seems like all they need is a spark to blast through resistance. I imagined Wednesday’s FOMC minutes could be that spark – it wasn’t. Now, it’s beginning to look like the trend is fading. Nevertheless, that could change in an instant with the right financial spark.

What are some immediate concerns that could push gold above $1380? Maybe a breakdown in trade negotiations with China or perhaps a monumental shift in the Mueller investigation or one hundred other things. Political tension in the US and around the world is elevated and rising. I don’t see that changing anytime soon. At some point, it could boil over into civil unrest and rioting. In this environment, the conditions remain primed for a financial spark that sends gold suddenly higher.

GOLD WEEKLY 

Gold prices are once again close to the bull market breakout line. Does the trend have what it takes this time to push through or will the bulls walk away defeated once again? Time will tell – the US Dollar likely holds the keys. I do believe, that when gold does break through $1380 – $1400, there will be enough stored energy to thrust prices to $1500+ rather quickly.

Note: The MFI is back at the trendline that has stopped prices since 2014.

US DOLLAR WEEKLY

To discern if gold is going to breakout – we need to take a good look at the dollar. Prices formed a weekly swing high, and it appears the dollar is at a critical crossroads.

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