Times are changing in the gold market. If anything, gold’s attempt to break out from a declining pattern, which marks the second most brutal bear market in precious metals, is currently THE most important news for gold bulls.
The gold chart suggests that it could be breaking out very soon, after five touchpoints on the declining resistance line. Note on the chart that we just broke out today. Don’t get too excited, however, as a three day follow-through is absolutely required for a confirmation the breakout.
Moreover, it seems that the interest rate hike bubble is exploding. The market has overreacted on the Fed’s interest rate hike, as it is telling the same story for 5 years now. Because of that, the dollar is not able to continue its rally.
The consolidation of the U.S. dollar is taking too much time, and there are no signs of a continuation of the rally in the short term. The strongly declining volume on the chart suggests interest in the dollar is waning (see red line below).
The strong reaction in the gold and silver mining space could be suggesting that a trend change is underway. We are extremely close to that point, there is simply a little bit of additional proof needed, both in bullion prices as in the gold mining area.