Gold is showing a textbook channel buy signal. It had been bouncing along the bottom of its long-term channel since May. Its now lifting off the bottom and starting its next upleg. Data is for GLD - the main gold bullion ETF.

Key points:

• Down trend reversed at channel bottom and 2 year average price
• Breakout of correction channel this week
• Break above previous $158 high this week
• Break above 40 week average price this week
• Bullish MACD crossover three weeks ago
• RSI crossing 50 this week. RSI broke above its down trend line in May.
• Stochastics crossed 50 last week
  

Silver is also doing well, and has begun outperforming gold.

Given that gold's long-term up trend remains in force, it should exceed its previous high within the next 12-18 months. Only a drop below $157 would negate this outlook.