Two weeks ago Gold broke the 2011 6 year down trend line again since the failed break out in May. My suspicion was that this was another failed break out and we would see another smack down before a successful break out later in the year. We did indeed get a smash down last week, but it did not break back down below the down trend. This morning we have a strong break higher in Gold, effectively bouncing off the down trend line which appears to be demonstrating support. This support could confirm the breaking of the down trend and signify much higher prices in the weeks and months to come. Once the down trend break is confirmed there is little holding gold back.
Fundamentally, everything appears to be in golds favour. A weakening dollar, increasing geopolitical tensions, physical demand and seasonality will all put upward pressure on the gold price.
If we see higher prices over the next two days, it should confirm the down trend break. If it gets smashed back down again, we may have a little longer to wait.
It was always just going to be a matter of time for gold. Perhaps now is the time.