This morning I focused on silver, and whether it was in the process of creating a bottom. Tonight I want to take a look at gold and the triangle pattern that it has formed.
Since May, gold has been creating higher lows while at the same time setting lower highs. This price action has created a symmetrical triangle pattern, shown in blue. As the price consolidates, volume has fallen off which is similar to what we are seeing take place in silver. This type of setup is commonly viewed as a continuation pattern, which is bearish for gold.
If the price of gold does in fact break to the downside, the next important level of support will likely be $1,525 (green line).
