To be bullish on gold, I want to see a break above the declining tops.
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=$xau,uu[e,a]waclyyay[df][pc8!c34][vc60][i][j32803117,y]&r=4484.png
FWIW, here are some opposite views on gold:
Clif Droke:
The XAU index, on the other hand, has already undergone a lengthy corrective phase in 2004 and after trending below the falling 30/60/90-day moving averages for the past few months has recently broken above all three of them, most recently closing above the 92.00 level. Not only is the XAU above this important moving average triage but the moving averages are in their proper alignment. This strongly suggests a rally for XAU in September. The XAU, meanwhile, has been diverging to the upside relative to the broad market as represented by the S&P 500, another positive technical sign in the short-term. XAU should have a favorable month of September to reward the patience of those who have waited through the grinding market trend of the past 3-4 months.
Robert McHugh:
Like the Dollar, Gold is crawling along its 50 Day moving average, but along its lower boundary line of its long-term trend-channel rather than its top. Since July 2003, about half the time, Gold moved in the same direction as the Dollar. One reason for this may be the influence of foreign investors using non-dollar currencies. If enough demand or selling occurs for Gold in non-dollar currencies, Gold can occasionally move in sync with the dollar. This has occurred fifty percent of the time since 2003. Gold remains inside its long-term rising trend-channel but is flirting with disaster. The MACD looks tired and toppy. The threat of deflation may be the cause. The PPI deflated and so has M-3. Unless the Fed pumps - and it would should equities collapse - Gold may feel pressed.
And to add another opinion, here is Ned W. Schmidt's:
Fundamentals are driving the Gold price, and will drive it higher. Remember that this process is really the U.S. dollar being devalued. For whatever the true reason, our intermediate indicators for Gold, as shown in the last graph, and Silver seem to be moving toward buy signals. Short term measures gave buy signals on both last week. An important time to buy Gold and Silver may be approaching, and hopefully you are ready to do so. When Gold is trading for more than US$1,200, will you be sitting on profits or still reading brokerage reports on technology stocks?
But often my problem is thinking too much.
I'm long on the 8/34 crossover but sure would like to see the declining tops broken. I plan to sell at $1200/oz.