Gold has Good Chance to Break-Out Now

Jun 12 04:06 2019 Print This Article

The more times a level is tested, the weaker it becomes and the more likely it is to break.

Once again, Gold has rallied up to the wall of resistance in the $1350 to $1375 region. Gold has previously tested that wall a handful of times but failed to break through.

This time, Gold is in position to punch through and I will explain why.

First, we can allude to what we already wrote. The more times a level is tested, the more likely it is to break. By virtue of testing resistance again, Gold is already in a better position.

Second, the fundamentals are moving into place.

Specifically, market-based indicators of real interest rates (the fundamental driver for Gold) are falling in anticipation of Fed easing, which is nearly a given at this point.

Over the past year, we’ve noted that in 11 of the 13 rate-cut cycles since 1955, gold stocks have averaged a 172% gain from the bottom (usually a few months before) around the first rate cut.

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About Article Author

Daily Gold

Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for precious metals investors. The Daily Gold was recently anmed one of the top 50 Investment Blogs by DailyReckoning and WalletHub

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