A Double Bottom for Gold?


". . .odds are that the metal has double bottomed on the charts. . ."

Spot gold is now up over $18 and is nearing its near-term downtrend on the charts. As I noted on Friday, sales of the yellow metal on the gold ETF (GLD) have only come at capitulation points for gold since the Fed began to explode its balance sheet back in September of 2008, when investor demand for the yellow metal accelerated. And we obviously had one of those capitulation points on Thursday and Friday of last week.

In light of that capitulation, odds are that the metal has double bottomed on the charts if this downtrend is taken out sometime over the next few days. If so, then odds are that the correction since the February peak is now over, which sets up another near-term attempt at breaking out above $1,000.

The overall bearish sentiment that currently pervades the gold market is also very constructive for a rally.

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