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For
gold investors, first the bad
news – and let us be clear
up front: it’s not really
that bad. Notice in the
Comex chart below that the price of gold has been
meandering within a pennant formation for more than a year. You don’t have to be a technician to see that this could
comfortably continue for some
time – well into
2014, perhaps – before
the converging lines of
the pennant will narrow sufficiently to force
gold to “escape” either up or down. You
can relax about which
direction is the more likely,
since the pattern so far
looks like a classic
consolidation, tipping the odds
toward a breakout rather than a breakdown.
 
However, our own proprietary tools (a.k.a. Hidden Pivot Analysis) suggest that it could be
a while before the excitement begins. This is implied by December Gold’s failure in October to surpass an important peak at $1802 recorded seven months earlier, in March of 2012. Had
the recent rally exceeded that peak, it would
have created a bullish “impulse leg”
of weekly-chart degree,
clearing a path to at
least $1976. Alas, the rally
chickened out just five
points shy of impulsiveness,
casting gold into corrective purgatory
for an indefinite spell.
A Rare Opportunity
So what would it
take to hasten bullion’s northbound exit
from the pennant? Here the news is good, for it would require
nothing more than a measly $5 thrust that is uncorrected
between 1798 and 1803. Moreover,
according to our technical runes, the thrust would not have to exceed the third peak at
$1823 to signal a breakout
with sufficient power to reach $1976 over the near term. In fact, those familiar with our
“camouflage” trading technique could conceivably be handed a rare opportunity to board with risk very
tightly controlled if a shallow pullback
occurs from somewhere between 1803 and
1823. This is shown in
the chart with dotted price bars, and the opportunity would be about as good as it gets for bulls looking to initiate positions or add to existing ones. If you’d like to learn more about “camouflage” trading and the Hidden Pivot Method, click
here.
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