GOLD Daily Chart; Downward-Sloping Channel; Sideways Symmetrical Triangle

Gold enjoys a summer orgy running from 1800 to nearly 2100 in only three weeks. However, the US dollar stabilizes and rumors of Uncle Buck's demise are greatly exaggerated. The dollar charts remain agreeable to higher prices which would send gold and the stock market lower. The dollar rocket launched in March sending equities, gold and silver into Hades. Perhaps that fractal repeats? Traders remain uber complacent and fearless which occurs at stock market tops.

Gold gives up the gains in the summer dropping to 1850 in September now at 19 hundo. The chart indicators do not say anything. They stagger sideways like Uncle Charlie at his birthday party last week. The red downward-sloping channel is in play with lots of touches on the top and bottom rails adding to its credibility. Price is testing the upper red trend line now and deciding if it should drop back down to the lower rail again at 1800-1825.

The light blue sideways symmetrical triangle is in play. The vertical side of the small triangle is a hundo points. Gold is at the apex of the triangle and has to make a decision up or down, thus, gold bulls want to see 2000-ish while gold bears are looking for 1800-ish. For a larger triangle, it would have been better to see price come down for a touch of the lower light blue trend line in August. But nonetheless, simply looking at some numbers, the vertical side of the triangle in early August is almost 3 hundo points. Keep that in mind. Once price starts rolling in a certain direction, up or down, the move may not be 100 points but rather 200 or 300.

The purple arrows show the tight standard deviation bands that squeeze-out huge price moves. Tight bands forecast a big move on the come but do not predict direction. Think of it as a tube of toothpaste that you smash down on with your fist. A huge stream of toothpaste flies out but you have no idea what direction the mess is headed. In July, the squeeze was up creating that huge rally. In September, the squeeze was down. The bands are squeezing in tight again so a big move is coming, likely the 100+ move discussed above.

The direction likely depends on the US dollar and as mentioned in the first paragraph, the dollar is expected to move higher, and perhaps rapidly, tanking gold and stocks. The dark blue lines show support at the 1800-1825 congestion zone which is a logical landing area for price should it break lower out of the triangle. The green lines show the upside breakout from the triangle targeting the 1980-2020 range at strong price resistance levels.

The expectation is for gold and stocks to move lower as the dollar moves higher. If you bring up the gold weekly chart, you see a weak and bleak MACD line and money flow wanting to see another lower low after price bounced the last three weeks. This would be sub 1850. The critical 20-week MA support is at 1879. Pay attention to this. If it fails, turn out the lights the party's over as Willie would opine. 

On the gold monthly, the MACD line remains elevated with a slight slope higher. This hints that after a few more weeks of sogginess, gold will want to try to come back up again. There is likely lots of sideways stuff ahead for gold through 1750-2000 for the next few months. Keystone is not holding any gold positions currently long or short. Gold is trading at 1911. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.