This has been an interesting year for gold. There has been wild price swings due to extreme political and economic events round the globe making gold a little more difficult to trade than normal. That being said if we look at the charts it appears we could be at the beginning stages of another major rally in both stocks and commodities.
Let’s just jump right into the charts…
Gold Miner Stock Bullish Percent Index:
If you take a look at the bullish percent chart for gold miner stocks it appears that stocks are trading at the lower reversal zone. The last time we had a similar setup like this gold rallied 15% and gold stocks jumped nearly 25% over the following 3 months.

Gold Bullion 4 Hour Futures Chart:
This chart of gold shows us that a bottom formed in early July and that buyers are now in control. It looks as though we are getting the first impulse leg which should top out around $1550. After that I would expect some type of pause or pullback before price continues higher. This is also when I will be looking to enter precious metals as long as price and volume action confirm this upward thrust.

Jul 2011

Source :  Bullion Bulletin