Chart of the Week: Gold Breaks out of its Box
Our chart of the week shows how the biggest story in the market played out this week… how gold “broke out of the box.”
Regular readers know we’ve been steady bulls on the ultimate “anti-paper” form of money – gold – for over eight years.
#-ad_banner-#We don’t try to dissect every $20 or $30 move in the price of gold like the folks on CNBC do. There’s no need. We know gold is rising, because Europe and the U.S. have racked up massive obligations that can’t be paid back with sound, honest money. The only way out of these obligations is to pay them off with devalued, debased paper currency. The winner in the whole wretched system is “real money”: gold.
Early this year, we highlighted how gold moved out of a sideways trading pattern in the $1,300 to $1,400 range. Some traders refer to a pattern like this as a “box.” After this move, gold advanced into the $1,500 range and moved sideways again.
But as this week’s chart shows, gold just broke out of its box to reach a new high. The trend of sound, honest money rising against IOUs from bankrupt governments continues…