Monday, 22 July 2013

Important rally for gold on Monday 22 July: Written 2013-07-23

Gold made an important jump through $1300 on Monday at the Asian open and then followed through with an impressive performance to get to about $1340 by the COMEX close in NYC.

Now for a basic chart.

The pitchfork in force since April (actually with price points as far back as last December is still in force, so the price is still fighting the medium term downtrend. The two steep lines starting in April seem to have been broken well to the upside. The lower of these was formidable resistance in early July:

Now for a basic chart. Points to watch are given below:


1. The nasty blue resistance line seems to be irrelevant now. This marked the steep downtrend that could have taken gold to $980 and even to $640.

2. The green parallel line has been broken to the upside by last week's action and especially by this Monday's action that has taken the price $40 above it.

3. The pitchfork shown on the chart in force since last December and defined by the high and low of the April crash is operating nicely. The current price is at the upper quartile of the pitchfork, the black parallel line. Note how many times gold has traded and made highs and lows that touch this line!

4. Reaching this parallel line would take gold just past the (approximate) $1339 target of the inverted Head and Shoulders centred on the $1180 low.  Maybe this could be time for a small correction there as that line is reached. It has practically been reached as I write:

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