Gold bounces off support again Wednesday with some indicators pointing to much higher prices. GLD gold ETF fund – daily trading chart This week gold has been pulling back after last week’s massive one day rally. Hopefully that rally was not a one-day wonder but rather a sign that smart money is still moving into gold and not most retail traders trying to make a quick buck. Gold stocks/gold bullion ratio – weekly chart This chart shows we now have a clean breakout, which is extremely bullish for the price of gold. This signal is not fully confirmed until we have the closing price Friday at 4pm ET. GDX gold miner stocks fund – daily trading chart This chart shows a nice rally to the February resistance level with a small bull flag and a daily close above resistance. Wednesday’s price action is very bullish but our support trend line is much to steep for gold stocks to maintain. Those with a high-risk appetite may like this, but I prefer to wait for a more conservative setup. The USD is halfway done its move The dollar broke down sharply a few weeks ago and is now forming a bear flag chart pattern. This pattern generally forms at the half way point of a move. If the trend continues, we can expect to see much lower prices for the USD in the next one to two weeks. Gold trading conclusion: While gold bullion is looking a little top heavy, the internals like gold stocks and the USD are shouting the opposite. Gold is currently at support, which is generally a good place to add to positions. If the price of gold breaks down from here, there is a clean exit point, which is a daily candle close below the support level on the GLD gold fund chart. Light crude oil makes a SWEET signal – Part 2 Crude oil makes a run higher giving investors some what of a tradable bounce. Although this is great for our long trades, this is a catch 22. Gas prices are starting to rise again and if this trade follows through. We could see $65 per barrel and a possibility of oil retesting $100 level within the next six-12 months. Not a pleasant thought in the grand scheme of things. See Light crude oil makes a SWEET signal – Part 1 if you want to view my previous post on light sweet crude oil. Trading light sweet crude oil – weekly buy signal Weekly chart signals carry much more strength for breakouts compared to the daily chart. This was a picture perfect breakout and many of us went long on the breakout a couple of weeks ago. Oil along with the rest of the market is currently over bought and I expect a pullback to test support in the near future, at which point we can look to add to our positions if the technicals stay strong.

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