I’ve been watching gold prices and the action of gold mining stocks for a couple of years now and this past week, as anticipated, gold prices broke out of a ‘pennant formation’ and did so on heavy trading volume. The chart below is of the gold exchange traded fund ‘GLD’.
Historically speaking, this classic ‘breakout action’ often leads to a rally. Typically, breakouts from pennant formations rally about as far above the formation as they did below the formation which means that gold and gold mining stocks could enjoy a nice rally from here.
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