Gold is on the verge of a big breakout

Last night, after Donald Trump bemoaned the strength in the dollar and the gold price jumped in reaction, I shared this chart on twitter. The last time gold tested this key resistance line, I was less optimistic about its ability to overcome it. However, as technicians like to say, the more times resistance is tested the weaker it becomes.

 And, as my friends at Nautilus recently pointed out, the dollar is possibly following a pattern very similar to that near the 2002 peak. If Donald Trump get his way and the dollar peaks and reverses right here, gold will almost certainly break out, officially ending its 6-year bear market.

Finally, from a fundamental standpoint, gold has perhaps never been cheaper relative to financial assets than it is today. In other words, once it does break out there is plenty of potential to the upside.

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