Commentary for September 16, 2009

| September 16, 2009

The Gold Currency Index and gold in US dollar terms both moved sharply higher today following the recent formation of a bullish ascending triangle on the GCI daily chart.

The GCI has now reconfirmed the uptrend from late August and a test of the March high near 25.40 has become likely. More importantly, gold closed well above that key congestion resistance in the $1,005 area, signaling a very important long-term breakout. As always, the initial move of a breakout is only the first step. We will need to see confirmation in the form of follow through during subsequent sessions. By our measures, the long-term breakout in gold will be confirmed when both the daily and weekly charts close above $1,028, which could happen as early as Friday. Stay tuned!

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Category: Commentary, Market Update


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