If you don’t believe in chart patterns and technical analysis, good luck trading gold.

GC has been buffeted by bad guys, bullied by Bitcoin, and bolstered by central bankers.  Yet, despite massive manipulation, it has behaved in very predictable ways — though not without plenty of headfakes.

Most recently, GC popped back above a critical trend line that represented a clear separation of bullish and bearish paths.  The long call was made easier by the USD behaving as expected.  From 1250 to 1365 (yesterday) is a nifty 9.2% gain.  Score one for the chartists.

continued for members…

As I noted the past few days, GC is sitting just below the neckline of the huge IH&S that could result in a significant breakout.  The fly in the ointment: I don’t think TPTB will let it break out.  So, you should either take profits here in the 1348-1365 range, or at least set your stops at this level.

There’s a 50:50 chance that it pops higher, but only if DXY can reach its channel bottom at 87.50ish. Since DXY tagged our 88.423 target earlier today, I suspect it’s due for at least a bounce.

Therefore, my gut tells me that GC will suffer the same fate as in September, when it reversed at the very same .886 Fib.  If so, look for it to pull back to at least the .236 channel line, currently around 1315, with secondary support at the rapidly rising SMA50/SMA100 (1295).Stay tuned.