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| Gold Futures (Aug) Daily |
Gold has been working its way closer into the apex of a descending triangle on the daily chart... and I believe a decisive move is coming soon. Typically this setup is a bearish continuation pattern, but I have seen a lot of folks chattering about it and it makes me hesitant until I see more confirmation. Important levels on the August contract are 1530ish and 1640ish. Considering how this pattern is developing, I thought I would dig a bit more and see what else I could find.
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| Hulbert Gold Sentiment (Sentimentrader.com) |
This indicator is courtesy of Sentimentrader.com and the Hulbert Financial Digest. It gives an aggregate of newsletter data showing net long/short exposure. It is considered to be a contrary indicator when at extremes... and as you can see, it is showing an extreme right now. This is a red flag for the bearish case considering it is suggesting the majority of Gold newsletters are suggesting flat to short positioning.
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| Gold Seasonality (Sentimentrader.com) |
Gold seasonality is also a bit of a red flag for the bearish case. You can see that we are heading into the strongest seasonal period of the year... and that deserves some attention. August and September are the 2 most bullish months out of the year, which is likely the time Gold will be making its move out of that triangle pattern.
Overall... I get the sense that the daily chart pattern on Gold futures could easily turn into something more bullish if it breaks up and over the 1625-1640ish area. I'll be watching Gold pretty closely the next few weeks and will follow up with any new developments.
