News / Commodities
After this precious metal corrected from its high of a little above $1000 per ounce, gold has gone sideways since March.
Let’s take a look at its performance for the past year. After hovering in between $600 to $700 per ounce from June 2006 to September 2007, gold finally makes its move up. After breaking out, it rose to its high back in March of this year and has tapered off from there. But the long-term support for gold is still intact at $825 which means things are still bullish. 
Looking at the short-term chart, we feel gold trading hasn’t been dynamic as there are a lot of gaps created. The gaps aren’t due to extreme volatility but rather to the anemic daily range from around middle of April. Anyway, the movement of gold for the past six months seems to be consolidating in what looks like an inverted head & shoulders pattern, which is bullish.
Currently, gold is correcting from its recent high. It has broken out of the formation and has pulled back to the neckline at current levels. This is to be expected when traders take their profits.
But if this were to follow the third tenet of technical analysis (history repeats itself), then we should expect gold to return to $1010, or more. The issues that would benefit from this would definitely be mining companies. So will gold follow the third tenet of technical analysis? I think it’s just a matter of time before gold makes its move again. 
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