Double Bottom Appears Bullish for Gold Futures

Technical analysts are looking for the gold futures market to soon rebound to the $1,500 per ounce area after making a “double-bottom” popular charting formation yesterday.  Gold futures have been trending decisively lower since October.

A double bottom is used by analysts to predict a possible low-price of support followed by a retracement higher, and finally a second low that meets, or attempts to meet, the previous low.  Gold futures reached a two-year low in mid-April at the $1,320 area, followed by a rebound to $1,487 at the beginning of this month, and finally a second low yesterday at the $1,336 area.
            
While the technical’s do show a double bottom formation on the (gold futures) chart, the fundamentals cannot be ignored,” said Kevin Craney, a senior commodities broker at RJO Futures in Chicago, in a recent e-mail exchange, regarding the current gold futures situation.  Craney added, “Chairman Bernanke will speak tomorrow and the gold (futures) market will be listening.”

The trend for gold futures is down, but this bottoming formation may be eluding to a possible change in trend back upward.  The weekly chart analysis for gold futures (in my study) is forewarning of a possible change in trend too.

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