We can see that we have a bullish price channel (in purple) with a support at $1150, so as long as prices advance and trade within the channel, we consider that gold is bullish.
Moreover the Bollinger bands (in pink) indicate a strong uptrend in the gold price which moves to the upper band and walk the band with numerous touches.
Technically, prices are relatively high when above the upper band (upper band is 2 standard deviations above the 20-period simple moving average). However, and in this case relatively high (overbought) should not be regarded as bearish or as a sell signal (see other indicators).
Some traders buy when price breaks above the upper Bollinger Bands or sell when price falls below the lower Bollinger Bands. Also when the bands lie close together a period of low volatility in stock price is indicated. When they are far apart a period of high volatility in price is indicated, here in this chart we enter in a period of high volatility.
Furthermore the parabolic SAR start a new parabolic arc and the dots (SAR level) are below the gold price which means that we are in a uptrend. As time goes on the distance between price and the SAR level will decrease, until eventually the market will pullback and touch the SAR level.
The MACD line (in green) crosses up through the signal line (in blue), thus it indicates us that we are in a bullish crossover and that we should buy gold.
RSI is greater than the 70 support which means that we are in a uptrend (between RSI 40 and 80), but it can leads to a brief correction.
Elliott wave theory (18/05/2006 - 18/06/2010)
In the chart above we can clearly see that the bullish gold trend follows the Elliott wave theory. The first small five-wave sequence, waves 1, 3 and 5 are motive, while waves 2 and 4 are corrective. We are in a primary cycle, which takes from a few months to a couple of years.
We can see that the first wave of a new bull trend begins (wave 1, 03/2010), during this time volume might increase a bit as prices rise.
In June 18th 2010 gold price reached to a new high of $1262/oz, so an increase of 38.83% in one year (since June 18th 2009 $909/oz).
Goldman Sachs predicted in December 3rd 2009 these average prices:
-->2010 - $1,350 per ounce
-->2011 - $1425 per ounce
--> So Gold should reach the $1,350/oz before the end of 2010.
