If the equities story is so strong, why the consistent interest in gold?<\/p>\n
I have to break with Jeff a bit on this one… I think gold is more likely to run higher for the next few weeks, rather than lower. Today I’ll show you why.<\/p>\n
Take a look at this daily chart of gold…<\/p>\n
![\"\"](\"https:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/mm\/201911-MM\/20191102-MM-01.png\")
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From the start of September, gold has been trading in an increasingly narrow range… between the high of $1,560 per ounce and a low of about $1,470.<\/p>\n
When this sort of action occurs, it forms a falling resistance<\/a> line and a rising support<\/a> line. That results in a symmetrical triangle pattern – as you can see above. And with this week’s action, it appears that gold has broken out of that pattern to the upside.<\/p>\n The catalyst for this, of course, is the Fed’s decision on Wednesday to cut interest rates further by 25 basis points. Gold bugs rightly see more easy money and central bank intervention as bullish for precious metals.<\/p>\n Now, the big question is whether that breakout will hold. Sometimes a breakout is more like a “fake out” as the price retreats back below its new support line.<\/p>\n To figure that out, it’s best to look to the momentum indicators. And there’s evidence that the latest bullish move in gold is just getting started.<\/p>\n A MACD<\/a> bullish cross – where the MACD’s short-term moving average line (black) crosses above the longer-term moving average line (red) – coincided with the breakout. You can see it circled blue in the chart above. That tells us the short-term momentum is in favor of gold moving higher.<\/p>\n We can also see that the Relative Strength Index (RSI)<\/a> is trading in a neutral position. Gold is neither overbought nor oversold, and thus has plenty of room to run higher.<\/p>\n All this leads me to believe the gold breakout is for real… and that we should see it run higher through the end of the year.<\/p>\n If you’re holding gold or gold stocks, sit tight. I’m convinced you’ll be rewarded for your patience.<\/p>\n And if you’re not, consider adding some exposure to the metal before the year is out.<\/p>\n Regards,<\/p>\n Mike Merson P.S. <\/strong>The VanEck Vectors Gold Miners ETF (GDX) is one of the main securities Jeff trades on his newest option trading advisories, Jeff Clark Trader<\/em>.<\/p>\n As you saw today, gold provides profitable trading opportunities all the time. And with Jeff’s guidance, you can profit from specific, conservative option plays<\/a> – all while learning to spot these plays yourself.<\/p>\n
\nManaging Editor, Market Minute<\/em><\/p>\n