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News & ResearchEverybody Loves a Double Bottom, Right?!

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Well, gold has been establishing a support level for nearly three months now - starting with the most recent low on May 16 [when LBMA PM Fix was $1,548.50]

As the chart shows: that price was almost identical to the low of December 29, 2011: close enough, by my reckoning, to at least warrant a shout of "double bottom" ... 

 

Gold_1yr

 

* Investopedia explains 'Double Bottom'

The double bottom looks like the letter "W". The twice touched low is considered a support level. 

Most technical analysts believe that the advance off of the first bottom should be 10-20%. The second bottom should form within 3-4% of the previous low, and volume on the ensuing advance should increase. 

Wednesday August 8, 2012 by Robin Newbould