GOLD Weekly Chart Sideways Symmetrical Triangle Failure Imminent

Gold has been traveling sideways ever since the top occurred at 1900 plus late last summer.  Price sits at the apex of the pink triangle and is running out of time, it must now make a decision to either break out above, or collapse out the bottom.  The heavy pink line shown on the vertical side represents 400 points.  Thus, which ever direction the breakout occurs, add 400 for the move.  For the gold bulls, the breakout would occur from 1660 to 1680. This targets 2060 to 2080.  For the gold bears, the breakdwon would occur from 1660 to 1640. This targets 1260 to 1240 and note the confluence with this target and horizontal support, as well as the 200-week MA.

The black circle shows a fakeout move to the upside that occurred about two-thirds of the way thru the development of the sideways triangle. This is textbook sideways triangle behavior and this type of fake out move is quite common. Price will typically return inside the triangle and then collapse out the bottom. Price came back inside the triangle but did not yet collapse.  (This works the opposite way as well. Two-thirdso the way thru the triangle price could have dropped out the bottom of the triangle, which would have been the fake out move and then back up into the triangle and out the top.) The chart favors the bearish outcome.

Focus on the indicators over the next two weeks.  The 50% level for RSI, stochsatics and money flow tells you who is winning (bears by a hair right now), as well as the MACD line (now on the verge of failing at the zero line). Projection is for a breakdown in gold coming within the next week or two. If you are long gold you must search your soul and decide if you want to hold on or perhaps at least trim positions. The 1250 target is in play for the months ahead.  Gold tumbling lower would be in concert with commodities, copper, and equities all tumbling lower as we slide into deflation. Gold will catapult higher once QE3 is announced. Note the August 2010 rally (QE2), and December 2011 rally (LTRO1/2), which are purely money pumping rallies provided by Chairman Bernanke; just as QE3 will be.  This information is for educational and entertainment purposes only. Do not invest based on anythng you read or view here. Consult your financial advisor before making any investment decision.