Gold Technical Analysis October 13, 2011

The gold markets continued to grind higher on Wednesday as traders are starting to question many of the “solutions” that the EU has come up with. After all, there has been no real announcement, and the market’s reaction has been overdone at this point. Stock markets have rallied at ridiculous paces, and the futures markets are out of control. Oddly enough, the gold markets have been the calmest over the last week or two.

The recent action suggests that a break out to the upside is coming, but the daily candle for Wednesday suggests that a pullback might happen first. It is because of this that we are ready to buy pullbacks as the long-term trend is to the upside, and there are a lot of questions out there making a “safe haven” flight to gold very possible.