Both GLD (gold ETF) and $GOLD (gold futures continuous contract) have fallen to the bottom of the large & potentially powerful symmetrical triangle pattern on this 10-year weekly chart. The next major trend in gold could be determined by the direction of the first solid weekly close above or below the triangle pattern.

Zooming down to this 6½ year daily chart, note how nearly all oversold readings of 30 or lower on the RSI (circled in green) were followed by at least a tradable rally in gold. Therefore, with the current oversold conditions on gold coupled with the fact it is trading at key trendline support, increased the odds for a least a decent counter-trend rallying in the coming weeks.

$GOLD daily June 28th

$GOLD daily June 28th$GOLD

Additionally, the fact that gold is pinching close to the apex of the larger triangle pattern means that we could see a major breakout in either direction soon as well. With the trend on gold bullish since the late 2016 lows along with the fact that oversold readings during a bull trend are usually fleeting & not persistent as they often are during bull markets, I favor a bullish resolution of this triangle pattern.

Should gold make an impulsive break to the downside, I would then favor a kickback rally shortly afterward for a backtest of the trendline from below. Once again, only weekly candlestick closes matter when trading off of the weekly time frame.