As you can see above, gold has held its ground, essentially flat for the past month. When compared to Silver and the broader market indices, however, you can see just how well relatively gold has done. These other asset classes have been crushed, losing greater than 5% in a very short span of time. So from a comparative standpoint, gold is clearly the preferred asset class of late.
From a short term standpoint, gold needs to close over $1,245/oz before we can consider the next leg higher. This represents the low from June and decent overhead resistance. I've drawn the green line to show what I'm talking about. Gold gave it a good try yesterday, but only managed to close in the middle of its range - a testament to resistance in this area. Internal indicators look good with MACD and RSI both decisively trending upwards. Also, yesterday's action came on very big volume, a sign of institutional accumulation.
Lastly, I'd like to point out what I refer to as a "railroad track" reversal pattern formed the last two weeks. This pattern is named after the image of two candlesticks of roughly equal size directly next to each other. The left candlestick is red, indicating weekly close lower. The right candlestick, however, is white, indicating a weekly higher close and complete retracement of the prior week. Ideally I would like to see more volume on the right candle to really confirm the reversal, but I think the volume was adequate enough to qualify for a reversal.
In closing, gold is still treading water in the lower half of its 2 year trading range, but it is making incremental gains as the days and weeks progress. Relative to the overall market, however, it has been the clear winner of late.