Interactive Investor is the web's biggest community for discussing UK investments and companies. Compare strategies, share knowledge and validate decisions (or not) on our discussion boards.
Gold's chart breakout creates excitement
By Alistair Strang | Wed, 30th August 2017 - 08:41
It's easy to forget about gold - we've two Golden Retrievers and neither ever bring any back! But the price of gold has recently started to exhibit signs of waking up with the result that short positions are liable to melt away. As the chart shows, the price has now bettered the downtrend since the highs of 2011 and, thus, some growth can be anticipated.
There's a little caveat, one liable to be important. The price of Brent crude also bettered a major downtrend and has since tended to flutter around rather than actually showing real growth.
As a result, we're a little nervous about the break upwards gold is showing and - similar to Brent and its trigger level around $56 - we'll not take gold too seriously unless the price actually betters $1,342 an ounce.
In such an event, our inclination shall be to cough politely and mention $1,384 as the next major point of interest, perhaps even $1,470 longer term.
Near-term, our outlook against gold suggests anything now above $1,327 should challenge an initial $1,336 with secondary, if bettered, at $1,342.
And only if $1,342 is bettered does the Big Picture suggest it has bottomed (for now) and future growth will make sense.
If trouble with the price of gold is planned, it requires to drop below 'blue' on the chart - currently $1,264. But, for now, we shall be watching for $1,342 making an appearance as, if this level is bettered, it will tend to indicate some happy daze ahead for gold miners.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.