GOLD
Gold has been on everyone's mind the last few weeks/months. With central banks all over the world pumping trillions of their currencies into the market it comes as no surprise that gold had a tremendous performance this year. And it seems that the metal still has some life in it. The technical picture is signaling a higher gold price. Gold broke decisively out of a falling wedge. The volume isn't what I would've liked to see but when a falling wedge breaks you frequently see volume increase only after the breakout.
I have also added the 'Price-Volume-Trend' indicator to the chart. This is an indicator I add to gauge the strength of wedges, whether falling or rising. Based on my backtests that I did at the start of my trading career, I noticed that the Price-Volume-Trend indicator frequently broke out of its pattern together with the wedge. If the PVT-indicator did not break, the wedge would frequently fail to materialize. And as you can see the PVT-indicator broke out too.
The only problem I have with this chart is that the break happened below the 50SMA. But, this is something that happens a lot with wedges. So, this is not a major problem. I have added a gold position on the Friday break. I don't have a set target in mind, I will look to trail my position. The next major resistance would be the high in August which should still be monitored in case gold rejects it.
Palladium
Palladium has been an interesting metal for the past few years. With hybrid cars becoming very popular it comes as no surprise that palladium might be heading higher because of increased demand. Palladium is used to produce catalytic converters for cars. It decreases pollution from gasoline engines, something that hybrid car manufacturers still need to worry about.
The chart of palladium is presenting a very interesting picture. It's currently trying to break out of an ascending triangle. It technically broke out on the Friday close but there wasn't enough conviction or penetration of the upper boundary in my opinion. The volume did increase which is a good sign. I am contemplating an entry if a more decisive break happens next week. I am looking for a retest of $2800. If Palladium can break the 2020 high, only time will tell how high it can go.
