Gold Buyers Step In on Dips

Note in this (daily) chart that buying volume has picked up again over the last two trading sessions. The blue circle in the sub-graph shows that gold is being bought on dips, but at progressively higher price levels. It is also being sold at lower levels; the last dip only lasted a day and a half. This pattern will force a break-out -- either up or down -- fairly soon.

I have also marked two tightening trend lines; one is the long-term gold trend, and the second is a weakening price trend. This bullish trend is marked as a pair of light blue lines, and the more recent bearish sentiment is marked with a burgundy trend line. Due to the long-term bull trend in gold, its safe-haven status, and the dogged devotion to the precious metals among gold bugs, I personally suspect that the gold trend will continue, and that buying will push gold prices to new highs. It is hard to imagine a scenario in which gold prices would fall, unless economic activity falters significantly. From a statistical standpoint, this pattern has a high probability of an eventual break-out to the upside. I could always be surprised, however.