Last week I went long the PowerShares DB Gold Double Long ETN (NYSE:DGP) the day before the Friday Jobs report. In a previous post I indicated that the gold setup was looking 50/50 because it was sliding right up at 52 week high resistance with the chance that some supply could come into the market.
Anyway, after Friday’s jobs numbers they slammed gold down and I thought for sure this could be the beginning of a new correction. But the end of day recovery combined with the strength in silver was very encouraging for the bullish side of this market.
Today’s upside action continues to make the gold market look quite bullish and I think we are setting up for a topside breakout here to new lifetime highs. I am going to be shocked if September is a down % month for the gold price given the strong seasonality and its current trading stance.
Gold has historically worked very well between end of August to January-February time frame and I see no reason for that to suddenly change right now.
It is looking like gold is once again showing that it will be the real bull market, not the fake one (the stock market). If gold breaks out this month it would seem to be saying that once again inflationary pumping is what will send all markets higher into the end of this year. Gold will likely be the first to break out and then everything else will play catch up.
There is currently as of today a bullish triple P setting up in the MACD histogram of the gold price which is good news for the bullish breakout case. We need to see a close above today’s high to confirm it.
The weekly chart is looking bullish as well indicating that the next 2 to 3 weeks should see upside momentum in gold.
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