Gold’s Long-Term Trend Is Still Up

Gold has been a lackluster performer over the past few years as it has gyrated back and forth between $1,600 to $2,100 per ounce and ending up close to where it started. Despite this sleepy performance, gold’s long-term trend is still intact and it is bullish.

A very important long-term uptrend line formed in the early-2000s and gold has been steadily rising along this line ever since. Despite its weakness earlier this year, gold has managed to remain above this uptrend line, which is a bullish sign:

Gold’s daily chart shows that there is an important resistance zone overhead between $2,000 and $2,100 that is holding the yellow metal back from making further gains. If gold can decisively break above the resistance zone with heavy volume, another leg of the long-term uptrend is likely to commence.

In addition to technical factors, there are many fundamental factors that are supporting the price of gold — namely surging global debt levels and liquidity from central banks. Unfortunately, the global economy is hopelessly addicted to debt and monetary stimulus and will freeze up without the help of either one; this is why I believe that gold is a good long-term investment at this point in time.

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