More Consolidation Ahead For Gold
Posted by barkand on October 13, 2011 under Classic chart patterns, Commodities | 
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Today we have a quick note on everybody’s favorite commodity / currency / religion.
After getting whacked a few weeks ago, gold has been slowly creeping higher. We see alot of resistance ahead. Consider:
- GLD is currently sitting at the 20-day moving average, which should at least act as a speed bump. Gold itself hit the 20-day average yesterday and pulled back.
- GLD is nearing the first Fib line of resistance at 166 and change (next one is at 169).
- The quasi-window from 166-167 should also be resistance. Of course, the spot market for gold does not have these price gaps. But looking at the U.S.-traded ETF helps to see areas of fast-moving prices.
The current chart pattern, along with diminishing volume, has us on alert for a bear flag which could potentially take GLD down to 135. We are not looking for things to get that bad. In fact, we would not be surprised if gold eventually goes much, much higher. But we do expect more “backing and filling” to frustrate the bulls before that happens.