Charts bullish on gold, saying any retreat is a buying opportunity

Jeff Clark
9 Comments|December 12, 2013

Traders should add to their positions on any pullback toward $1,230 per ounce.
It's about time for a gold rally.
 
After the bullish setup we saw two weeks ago, it was disappointing to see the precious metal decline and nearly take out support at $1,210 per ounce. That would have shifted the short-term view to bearish.
 
But it didn't happen.
 
Gold managed to hold above its support line. And it bounced back strongly – to the point where anyone who bought the metal on my recommendation last month is now showing a profit on the trade.
 
And there are even more gains ahead...
 
In November, we looked at a weekly chart of gold and the positive setup in the MACD indicator. Today, we're looking at the daily pattern. And it's bullish. Take a look...
 


Gold has broken out to the upside of a bullish falling-wedge pattern. And it has done so with a positive cross on the MACD, a momentum indicator.
 
Without getting too complicated, when the black line crosses over the red line, it's bullish. The red arrows point to where that bullish cross occurred over the past few months. Each time, it led to a short-term move higher for gold. We should see something similar this time as well.
 
Of course, we can't rule out a possible retest of the former resistance line of the wedge pattern around $1,230 per ounce.

But that pullback will be a buying opportunity.
 
Gold should rally to at least the first red resistance line near $1,290 per ounce. And there's a good chance we could see the metal get back up to the second resistance line above $1,350.
 
The weekly chart of gold remains bullish. And now we have the daily chart jumping into the bullish camp. So it looks like more gains are in store for the metal.
 
Traders should hold onto their gold and add to their positions on any pullback toward $1,230 per ounce.
Tags: GOLD

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Comments

Triangulate
http://www.stockhouse.com/opinion/independent-reports/2013/03/11/i-m-not-waiting-to-buy-gold-stocks-anymore
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December 14, 2013
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OntarioDave
They have been ranting Gold was oversold since $1600/oz...Gold is still bearish...why rush to try and catch the bottom...lots of time to take a position when it truly recovers...possibly more pain in store when stimulus is cut and the US dollar rallies... OntarioDave
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December 13, 2013
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Triangulate
The wedge looks really good on a line chart. Put it up on an OHLC chart and find me a wedge. Jeff is always looking for a silver lining. Need I remind anyone here he was "not going to wait any longer" to buy gold stocks in March of this year.
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December 14, 2013
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sweatman
Thank you Jeff, right on as usual. I continue to ring the bell and tell my crew to take their paper profits and *always* allocate a portion and go out and purchase physical gold and silver A sound strategy.
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December 13, 2013
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MakingHay
Great post Jeff. Charts don't lie. I love getting in on the bottom. And that's where we are. Can't make money following the herd.......... Hay
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December 13, 2013
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NeilDiamond1
Thanks jeff, keep telling us how you see the tea leaves.
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December 13, 2013
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thebaker
Charts or no charts, it does not matter. If we look at the facts, we know that the Chinese have been buying all the gold they can at any price they can. They don't worry about $1230 or $1700. They are buying with US dollars that they do not want to be stuck with when the big day comes. Gold Rules, "He who has the gold makes the rules".
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December 13, 2013
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waxguy
Charts don't lie? Good Grief. I think I'll stick with the tea leaves readers
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December 13, 2013
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hcdtrading
trying to pick a bottom is about as rookie as a trader or investor can be. And if that's a bullish chart than I must be high or something because that looks still pretty ugly to me. Buy on a confirmed uptrend is the way to profit .
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December 13, 2013
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