This a chart of Gold before and including its ultimate bottom some 15 years ago. The pattern is a well-defined flat bottomed descending triangle.

Fast forward to the “normal correction in gold and silver” over the past three plus years and what do we see?

SILVER

GOLD

As we pointed out almost a year ago, GOLD is following the YEN/$ cross. http://news.goldseek.com/GoldSeek/1381417452.php

While the YEN is hitting new lows against the $, GOLD is having difficulty following its lead to the downside. So, is there a clue as to whether this descending triangle fails on the downside and actually breaks up? This is a chart of the HUI in the late 90’s going into its final bottom in the year 2000.

HUI

Here is the HUI now.

The difference is easily discerned. So far this is an inverse head and shoulders formation and not a descending triangle that appeared in the late 90’s.  While the number of bulls in the precious metals could probably fill the diner down the street, these charts should give bears pause. A flat bottomed descending triangle that breaks the “wrong” way could cause massive short covering.

Signed,

It's a Mystery

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 -- Published: Tuesday, 9 September 2014 | E-Mail  | Print  | Source: GoldSeek.com

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