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Is Gold still in a downtrend or has it actually broken its downtrend? Both as it turns out, but only if viewed from
the proper perspective. Let me explain.
So says Tom McClellan (mcoscillator.com) in edited excerpts from his original article entitled Gold Breaks Downtrend, Sort Of.
[The following is presented by Lorimer Wilson, editor of www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
McClellan goes on to say in further edited excerpts:
The price plot of gold as priced in dollars is still below the declining tops line which dates back to late August 2013 but the same line drawn on the plot of gold priced in euros has already been broken.
Such disagreement can appear in a few different forms, but the two I pay most attention to are (1) divergences, and (2) different trend line behavior. It is the second category which is of interest now.
Gold prices have just started the process of building a pattern of higher highs and higher lows to define an uptrend but we already have a broken downtrend line on the plot of gold priced in euros. A couple of other examples of trend lines on each plot are shown in this week’s chart, and you can see that in each case, the euro price plot broke its downtrend line ahead of the equivalent line being broken on the dollar price. Indeed, the leftmost example did not even see the dollar price break its trend line, although there was nevertheless a pop upward after the euro price broke its downtrend.
Conclusion
The short answer is that the euro price of gold has nearly always proven to be “right” when there is such a disagreement between the two plots so I expect that to be the case again this time.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.mcoscillator.com/learning_center/weekly_chart/gold_breaks_downtrend_sort_of1/ (Copyright © 1996-2013 McClellan Financial Publications. All Rights Reserved.)
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