Very quietly, prices of gold have risen back above 1600. We wrote positively about Gold a few weeks ago that it was only a matter of time before the global monetary stimulus being enacted would start to rekindle inflation talk. In truth, the recent rally probably had more to do with the overall risk rally that took place last week. But, even before the hike back above 1600, the seeds were being put in place as prices were seeing support at 1570. Also, after hitting a 2012 low, Gold has been in a steady uptrend (see chart). The uptrend led to a triangle pattern forming.
If you missed the first move, there could be more to come as Gold has broken out of its triangle pattern and looks poised to continue with its breakout. In trading this breakout pattern, a long trade would be in place until prices of Gold trade back below the downtrend that they had broken above.
One important item for Gold this week will be Friday’s Non Farm Payrolls. The US Fed has stated that they prefer to take a “hold and see” attitude even as they admit US employment levels are weak. Nonetheless, another bad number would ignite political pressure for them to act.