I wrote a piece over at Bullion Directory titled True Gold Fan Speaks of Future Price. In what was almost an afterthought, I drew a triangle on the chart and highlighted $1,306.40 as an important level that gold would need to move through in order to continue higher.
So, what happened?
The gold price moved just a little above the $1,306.40 level on the chart?
How close you ask?
The price moved to $1,307.00 - a little above our hastily drawn line, but still within the triangle.
Upon nearing the upper boundary of the triangle price has backed off a bit and is currently under $1,290.00.
If you haven't read the article over at Bullion Directory highlighted above, I would encourage you to do so.
The Pitchfan - a combination pitchfork and Gann Fan - used in the charts above points to some important levels that gold will have to overcome in order to move higher. The Pitchfan also gives an idea both in terms of time and velocity the relative difficulty the gold price will have to traverse through each shaded resistance level.
Bottom Line: The gold price looks to be taking at least a temporary breather today. Will be interesting to see if the ECB QE announcement (or non-announcement) will end up being a case where gold is bought on the rumor and sold on the news, or if it will push price higher. Regardless, gold still needs to break out of the triangle pattern in order to move higher. Until it does, I don't expect price to move up much more. In fact, if price doesn't crack the upper boundary, it might move lower for a bit - we'll see.
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