Since the big leap upward in the gold price over $1,260.00 a few weeks ago the price has churned higher, lower, higher...

There is no denying that gold has made a good move from under $1050.00 to above $1,280.00, but in spite of all of the sound and fury, there hasn't necessarily been a definitive movement signifying something...yet.

One thing is certain, the price of gold can continue to move higher despite the technical indicators, but price isn't going to outrun the technicals forever.

Our first chart above is the Mass Index which can help identify trend reversals. So, what did the reversal look like on the far left - back in 2014?

It actually wasn't much of a reversal, relatively speaking. It was followed up by a climb in the gold price to a little over $1,300.00. However, afterwards, there was a significant decline in price.

The current state of the Mass Index in the first chart above indicates a bit more strongly (although not too strongly by itself) that a reversal in the gold price could be around the corner. Adding weight to that is the KST Indicator.

Gold's last gasp run higher in price from late 2014 to early 2015 saw the KST rollover. The KST Indicator can rise above 100 as the chart above shows. Once it dips below zero that indicates the bears are in control. So, this again lends to the idea that the gold price might continue to stretch a bit higher, but the crossover / rolling over of KST indicate that the gold price has run up relatively high and will in the not so distant future have to contract.

Looking at the gold price from another perspective, we also see that it's beginning to bump up against some resistance levels that it has yet to overcome.

The chart above utilizes the 45 degree angles favored by W.D. Gann to square time and price. The 45 degree angle can be considered a natural angle, and is a simple yet powerful way to visually see the energy of price. There is a declining channel defined by the two thickest red lines and a rising channel defined by the two thickest black lines (the bottom of the channel is only visible in the right-hand corner of the chart). The gold price has approached and backed down from the 45 degree line multiple times.

Someone looking at the above chart might see the horizontal line at $1,280.00 and think that the more times the price challenges the level, the more likely it will eventually break through. That is one truism. But the 45 degree line should be viewed as indicative of the energy of price. If the gold price is energetic it will move along or through 45 degree lines as price increases. It has been doing just that for several months. Around $1,280.00 though, the price energy of gold wanes and, in light of the technical indicators outlined above, gold doesn't have all the time in the world to break above $1,280.00 and muscle its way above $1,300.00. At this point, it would be a risky bet to take the under $1,300.00 side. Still, after leaping to $1,260.00 gold has appeared stymied leaving one to wonder if it will crack above $1,300.00 or not.

There is yet another gold channel to consider other than the two highlighted in the chart above...

There is a smaller channel, highlighted by the red lines, where the gold price has moved within since 2013. Price has challenged the upper part of the challenge, but has not convincingly broke out. Gold has made short work of many such channels the past few months, but this one still stands for now.

If we pull our perspective back a bit further in the chart above, this is what we get...

A rebound off either the top of the red or black declining channel would likely push the gold price back down towards $1,160.20. A further decline would see a reunion with $1,058.70. Lower than that and price edges dangerously close to $1,000.00 or below.

Many naysayers will say that, except for a pullback here and there, the gold price is finished declining and a new bull market has begun. By definition, the rise from under $1,050.00 to current levels is a bull market. The larger question, however, is whether this is a durable bull market? Has the gold bull crowd been fooled once again into believing that the bear market is finished and happy days are here again.

Perhaps a little historical perspective will prove useful...

A few points of interest on the chart above:

1) 0.764 / 0.618 1970's to 1980 Bull Market - Price moved above 0.764 but did not reach 0.618 or $515.60;

2) Current Gold Market - Price has moved above 0.764 but hasn't reached 0.618 or $1,380.30;

3) 1970's to 1980 Bull Market - Price bounced off Pitchfan (combination Pitchfork / Gann Fan) at A or 1.00, but high peaked under B or 0.50;

4) Current Gold Market - Price bounced off of C at 1.00 and has not yet reached D or 0.50 (currently slightly above $1,340.00)

A zoomed in view of the 1970's to 1980 Gold Bull...

The current gold market...

There is absolutely nothing to say the current model will continue to so closely reflect the pattern of the 1970's to 1980 bull market in gold, but the similarities are striking.

There is also nothing to say that the gold price won't advance to over $1,300.00. The current move certainly has a good deal of momentum behind it.

At a certain point, whether before or after $1,300.00, the gold price has gotten stretched very thin.

At the top of the above chart, the gold price is within a pitchfork pattern and has been since before 2014. It could easily reach over $1,300.00 and not violate the pitchfork. The wavy lines within / near the pitchfork (pink/green shaded with blue line) are Hurst Channels. You'll notice the gold price has stretched way above them. Typically the gold price - at some point - falls back not only within the Hurst Channels, but below them. Currently that would mean price would eventually fall to below $1,040.00 - likely to the $1,030's or below. Such a decline could take months to over a year to play out, but one extreme high above the Hurst Channels will beget an extreme low below them. Most of the other indicators are also noteworthy for having reached extreme high levels. All point to a gold price that will be correcting in the future.

Another perspective utilizing a pitchfork and Hurst Channels is provided above. It paints a similar picture of a gold price that has stretched and will have to work its way lower. As in a previous chart, the $1,160.00 level could come back into play as the gold price moves back below the bottom of the channels. Of note too is the fact that the gold price could move up to near or above the $1,320.00 level and still not cross the pitchfork buy trigger.

Another interesting pattern just forming shows up in the chart of gold and Fibonacci Channels...

On the way up, the gold price tended to dip upon making its final cross of the Fibonacci Channel, and then continue higher. On the way down, the gold price has tended to cross the channel and rebound back up to touch the channel before continuing lower. It's too early to tell whether this is an enduring pattern, but if the pattern holds, then the gold price should react off the current channel and head lower. And, if the pattern doesn't hold, it will be obvious fairly soon.

Square of 9 Dates (based on the work of W.D. Gann) also present a fascinating pattern...

The red arrows facing to the left point to where the price crosses the Square of 9 Date at 180 degrees. The previous two times this occurred, price rose and then fell until crossing the next 180 degree line. The third crossing of the 180 degree line happened in February and the price has continued higher. The next 180 degree line cross will be in the May-June 2017 time frame. If the current pattern holds, we should expect the gold price will be lower in May-June 2017 than it was in January of this year.

Our final chart is a look at price on a static Square of 9...

The previous two times that the gold price, on a monthly basis dating back to September 2014, attempted to finish above the 180 degree line ($1,263.00) it failed. This month the gold price has spent a fair part of the month above the $1,263.00 level, but the month isn't over yet, so we'll see if it can finish above the 180 degree line. Note too that the price at 360 degrees is $1,313.50 which is in the ballpark of the $1,305.00 - $1,307.00 level or so that many analysts have pointed out that gold needs to take out on a monthly basis to move higher.

Conclusion: The gold price, after jumping to $1,260.00 has spent a good deal of time churning. Some have declared that the gold bear is dead and that the price, except for the occasional correction, will be heading higher and not looking back. However, the fact that the gold price has hesitated around $1,280.00 and faces significant resistance above $1,300.00 poses the possibility that the gold price retrace from current levels, or around the $1,300.00 level, back to $1,160.00 or lower. Long-term there is reason to think the gold price tests, at a minimum, the 1980 high price of $873.00. More likely gold visits the $700's and , possibly as far as below $550, but that is the subject for another post.