Gold Bulls Hope Buyers Emerge At Key Price Support
Chris Kimble | Jul 13, 2021 10:04AM ET
It’s been a decade of ebb and flow for gold.
Bulls have seen the best of times (new all-time highs), the worst of times (a nearly 50% decline) and nearly the best of times again (a test of all-time highs).
Today’s gold-to-U.S.-dollar ratio monthly chart depicts this historic action, while highlighting key reversal patterns and price support/resistance to watch.
As you can see, the gold-to-U.S.-dollar ratio double-topped 10 years ago at (1). The ratio stumbled between support and resistance for over a year before confirming the reversal pattern by breaking key price support. When the decline was finally over, the ratio had slid nearly 50%!
After building a strong base, the gold ratio rallied once more and hit line (1) last year, where it created a large reversal pattern at (2). The result of that reversal pattern has been sideways to lower trading for the gold ratio, gold and silver. The ratio is currently trading near the bottom of a one-year price range marked by key support (3).
If buyers don’t emerge at (3), the ratio could be headed for a steeper decline. This would likely usher in selling pressure for gold, silver and the precious metals sector. Stay tuned.
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