ForexPros Daily Analysis June 09, 2011
Gold is about to hit its historical highs
The gold's price is back to its historical highs again. Many analysts and individual investors had estimated that the gold would not get back to 1550$ again this year, after the crash of the silver and other metals on the beginning of May. The daily & weekly charts show us once again that believing in a theory without keeping our minds opened to other scenarios, might prevent the trader from gaining a lot of money.
In fact, the crash of the gold and other commodities was necessary in technical analysis terms. Directional indicators were calling for overbought for months and it was just a matter of time until they would correct, and as they sharply went up, so did they fall.
However, whereas the silver is struggling to keep its price above the averages, the gold has calmly but quickly backed to 1500$ per ounce. An experienced trader knew how to take advantage of this situation. It was possible to spot the strong bullish "Double-Bottom" pattern at 1470$, and start looking for reversals around these levels. The reversal is better shown in the weekly chart.
Now, the gold is facing the psychological resistance at 1550$, which is preventing the price from hitting the pick at 1569$. A strong break-up of this resistance might launch the price to 1600$ and above. This might occur if the uncertainly in the US economy remains, since the gold is investors' safe shore in time of storms.
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