Gold: Major Bull Wedge Breakout?

After surging towards $1300, gold is taking a well-deserved short term rest. Can the rally continue?

Geopolitics news has gotten most of the credit for this rally, but Indian dealers have been buying huge amounts of gold in preparation for the April 28 wedding season Akha Teej celebrations.

Over the past two months, that’s where most of the demand has come from. Western analysts and investors often forget that Indian buyers follow Western news very closely.In fact, I would argue that India’s top gold traders are more in tune with gold-related news in the West than many Western analysts.

For example, gold surged higher on the night Donald Trump was elected because Indians bought gold maniacally when they realized Trump was going to win.

Their frenzied buying took gold to about $1340 that night. It continued until the Modi government stunned the buyers with a cash notes call-in.

The latest surge in Indian dealer buying appears to have peaked last week, but there are more key events that sit dead ahead in the Western news pipeline.

That could mean there will be no more than a short and sweet pause in both Indian and bank FOREX trader demand for gold.

After pausing in mid-February as Chinese New Year buying peaked, gold carved out a nice inverse H&S bull continuation pattern, with a neckline in the $1270 area.

Indian dealer “thunder buying” blasted gold over the neckline and towards the $1300 round number resistance area. It’s unknown whether gold will pull back to the $1260 – $1270 neckline area now. If it does, I’m a happy buyer of more gold, silver, and related stocks!

Gamblers can also buy now rather than waiting for the pullback. It can be done with small size via call options and other gold gambling products.

The greatest bull wedge chart pattern in the history of global markets: