Gold on the rise, what really lies beneath this move up?

Market Pulse: August 1, 2011

Last week December gold opened at $1,612.00 and closed the week at $1,631.30. More interesting is the Friday, July 1 close that was $1,484.90 and rose $146.40 by close on Friday, July 29. Not a bad month if you were long.

On the daily chart below you can see that technicals have been bullish since mid-July. Currently ADX is at 50.1 showing very strong trend strength. MACD is bullish and Stochastics are overbought. With such a strong trend I would not concern myself with the overbought condition. The four- and nine-day moving averages have crossed over the 18-day. On July 12 gold closed over $1560.00, breaking the resistance side of the range this market has been in. That was the day we saw a long recommendation in Trends in Futures at $1,564.40.

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