Gold is fast approaching a “break out or fake out” moment. The big money is likely laying even bigger bets – and the volatility in the next week could be enormous. What do I mean by that? Check out the chart below:
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article by Sean Brodrick
The chart of the SPDR Gold Trust (NYSE: GLD), the world’s biggest physical gold ETF tracks the price of gold very closely…[While] you can also see a downtrend that started in August of last year, gold and the GLD are banging up against that downtrend right now. That has caused gold to pause and pull back a bit. Naturally, today’s pullback in metal is multiplied in gold miners.
Traders have racked up a sweet week of gains. Now they’re ringing the cash register and running for the exits. That kind of short-term thinking isn’t the way to play this. Gold requires a long game. The next few days should tell us whether gold is really breaking out or if it’s a fake out, and gold has to go back and test its uptrend again.
…Long- and shorter-term forces are lining up to drive the gold price higher but in the very short term, Washington politics could be key, as entrenched powers fight over health care, taxes and more.
This is edge-of-your-seat stuff. We could see huge swings in either direction and, while I strongly believe the big trend is higher, a short-term pullback wouldn’t be surprising. Heck, this market is so volatile, they should rename gold, “dynamite”!
You don’t have to buy anything ahead of the next big break – there will be plenty of time to hop aboard gold’s next big bull run – but if you’re the type who looks for sweet entry points, a politics-related pullback could be just what you’re waiting for.
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