While most of the focus has been on the equity markets lately, the gold (FOREX:XAUUSDO) market has slowly been inching up. After making an all-time high close of $1904.92 on September 5, 2011 (see fig 1) the gold market then spiraled lower for the next several years. All that changed in 2016 when gold found a floor it liked and rallied to produce its first positive year since 2011, closing up almost 10% for the year.
Take a look at the chart, the dominant feature in this close only spot gold chart is the 6 yr downward trend line (see fig 2). This is a classic trend line and an important technical tool. The key elements of any trend line are that it touches three price points. The other key level to look at is where the downward sloping trend line will be broken on the upside. That will occur in this particular trend line when spot gold trades over $1300 an ounce. At that time I believe that gold will embark on a multiyear bull market. [Read more...]