Gold Daily Chart Bollinger Bands Two Leg Bull Flag Potential Two Leg Bear Flag

Gold daily chart shows the bollinger bands and how price pierces the outer band and moves thru the center to the other side, then back again (blue circles). We are now entering a seasonal slow period for gold, gold typically bottoms around August, as seen from last year, late July 2010. So some weakness would be expected as the flip flops imprint the sand over the next three months.

Despite a far higher price in gold in April, the indicators all show negative divergence (red lines) that created the spank down. Even the ADX was ever so slightly lower at the recent top compared to the Fall showing that the run up in price thru April was not as strong a trend as the Fall. Late January when price hit the lower BB, the precious metals, gold, etc...., were all rolling over, but along came the Middle East turmoil that catapulted commodity prices again. The two leg bull flag played out in text book style from February thru April.

In recent days, the euro woes resurfacing is adding some buoyancy to gold. Watch the formation of a potential two leg bear flag down now. Currently we would be in the sideways consolidation zone from which we would drop for the second leg. Say, leg one was 1570 down to 1470, 100 difference, so if gold starts down again from 1515-1530, that would target 1415-1430, which is also a hefty area of support. Keystone preferes the short side still yet with a target of 1425-1430 for reassessment. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.