By Scott Pluschau

This is an interesting development in the Gold futures. There is a "Rounding Bottom/Cup" type pattern on the 30 minute chart going back the past week which can be seen on the picture below. The path of least resistance is higher above here in the near term. The open interest on the short side that was put on during this past week here will begin to feel some heat of a losing position should price and volume begin to pick up to the upside as this pattern is "ripe" for breakout here. The Cup may form a "Handle" and that is something to also keep an eye on should it develop rather than take off from here. The "Bullish Cup with a Handle" pattern is definitely one to pay serious attention to.

(It looks to me like the Bears were "saved by the bell" as the market closed on Friday just as GC was making a run toward those clear skies on the 30 min chart.)

(Click on charts to expand)

Gold still has minor trendline resistance overhead as well as the "return line" in a Bearish Channel (Parallel Blue drawing) on the Daily chart to keep an eye on as well, as seen below. The order flow from the Bigger Picture is what matters most which is still Bearish, however when major developments in the big picture do change, there are times when it all began with a significant change in the phase of development on the 30 minute chart pattern initially. Any follow through with the Cup/Rounding Bottom current pattern will put the channel resistance and potential breakout into play quickly.

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 -- Published: Sunday, 12 January 2014 | E-Mail  | Print  | Source: GoldSeek.com

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