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Last week, gold prices continued moving up from the “double bottom” formation that signaled a coming reversal. A “weaker right shoulder” is now forming that could be the last downward push before the gold trend turns up. Prices closed the week at $1,644.80 per ounce.
The good news is the confirmation of this gold price reversal that we were looking for was a breakdown in the U.S. dollar, which has just happened.
This trend reversal in gold prices is now set with the breaking of the “weaker right shoulder” formation. Such a reversal after a three-month downtrend could be the start of a move up to the high set in August, or even extending further to the all-time high set previously this year. Investors may want to be ready to add gold to their portfolios if this buying opportunity happens.
Rick Andrews is president of Avant Capital Management.