After calling the interim top for Gold back in April I’ve been watching it consolidate ever since with an expectation that at some point it would probably move higher. It has threatened to break through the top of it’s consolidation ranges a couple of times now but still refuses to make the big move. Instead the trading range for Gold has started to get narrower and narrower which is a sure signal that Gold is becoming a Coiled Market. In short, if I am right, then the next move is going to be another big one…
Having a look at the chart above you can see the way the price action has started to fluctuate in an increasingly narrow band. That band is probably somewhere between about $3300 and $3400 USD which is a pretty tight range considering the price action we have seen in recent years.
Fundamentals haven’t really changed a lot in the last couple of months. The wars in Ukraine and Gaza continue. The tariff side-show has shuffled along and while the Federal Reserve is starting to sound a bit more dovish they haven’t really pulled the trigger on any moves. Even so, the market is starting to expect an Interest Rate Cut at the next Federal Reserve meeting in September so if that doesn’t come (or is bigger than expected) it might be enough to jolt gold out of this coiling stage.
Personally I still remain bullish on the Precious Metals long term. You could have made the case that Gold looked a bit “Toppy” back in April, but I think the consolidation since has really just confirmed that we didn’t see a major top then and the market just needed a rest after a really strong run. To me it’s not really a question of IF, but WHEN it runs again. Time will tell, but I don’t think it will be long now until it makes a fresh lurch toward $4000.
DISCLAIMER – This is not financial advice