Courtesy of Chris Kimble.
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Since the peak in 2011, Gold remains in a downtrend, creating a series of lower high and lower lows.
Gold’s rally in 2016 is attempting to break this 5-year falling trend, as it is attempting to break a series of lower highs.
Over the past 6-months, Gold could be creating a rising wedge pattern. This pattern two-thirds of the time, suggests lower prices are ahead.
If history is to come true per this pattern, support needs to be taken out at (1) above. If support does give way, selling pressure could increase.
The pattern in the US$ looks almost the polar opposite (bullish falling wedge resistance test in play).
Should Gold break above triple resistance, it would send a message that the multi-year downtrend is changing.
What happens at (1), support break or resistance breakout, should send an important message for Gold going forward over the next few months.
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