The gold buffs have not had a riveting time of late - well, at least compared to equities. And gold stocks have not had such a great time either.

You can see from the chart below that the precious metal is going nowhere:

Chart 1

click to here enlarge

It topped US$1008 on July 20 this year and has been locked in a $140 range ever since.

The weekly chart with an Elliott gives us no better clue - it merely confirms what we already know, which is that it is range trading:

Chart 2

click here to enlarge

We need to go up another time frame to a monthly chart before we get the big picture:

Chart 3

click here to enlarge

But it is an interesting chart nevertheless. We can see that gold came off a long-term trading range where it struggled at the US$400 before eventually breaking through and moving strongly for the next four years. This is how markets behave.

But the same can happen in reverse, and does. So what we are seeing now is a struggle at current levels. And my expectation is that it will struggle, and more than likely will come back to the US$700 levels for consolidation before attempting a new high.

But that high could be four or five or more years away. And anything can happen between now and then.

A monthly is not much use for trading, but it plays a better role as a beacon far away - giving us some broad guidance.

Enjoy the ride!

Tom Scollon
Chief Analyst
Trading Tutors Team