Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.
Gold's Sideways Pattern Should Resolve Itself to the Upside
Meanwhile, the dollar is under pressure vs. the Euro, which is sitting near its historical high, and has declined 6% vs. the Yen since late June... which probably deserves some credit for putting a floor under gold prices recently.
Let's have a look at the near term pattern that has developed in the GLD. Before the April high at 68.73, the GLD made a series of higher-highs and higher-lows off of the October 2005 low at 55.55. However, over the better part of the past 4 months, let's notice that the pattern has changed into a series of lower-highs and higher-lows, which is otherwise viewed as a coil or sideways congestion area -- in the aftermath of the larger upleg from 55.5 to 68.73.
Unless the integrity of the coil support line is compromised -- at the 7/26 low at 64.83 -- my pattern work argues that the sideways formation should resolve itself to the upside in a thrust that should challenge and hurdle the April high.