Gold surged higher Thursday, extending Wednesday's rally into the close following brief "sell the news" weakness earlier in the session, accompanying the quantitative easing announcement from the Federal Reserve. Price action has now moved slightly above the mid October all-time high near $1,381, and a confirmed breakout would reconfirm the secular uptrend and forecast additional gains.
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It is also important to note that the Gold Currency Index (GCI) closed at a new all-time high as well.
Recall that a negative divergence existed between the GCI and gold in September when gold last broke out to a new all-time high. That negative divergence no longer exists and both daily charts are equally bullish at the moment. If the GCI and gold subsequently experience synchronized confirmed breakouts to new all-time highs, that development would be a major bullish signal forecasting substantial gains for the precious metal during the next several months.
Disclosure: Long SGOL