Starting with the 8-year chart for gold we can see that there remains some risk of it gravitating towards the strong support in the $1000 area before the big corrective phase is over. However, with the dollar breaking down that risk is easing, and the chances of an upside breakout from the downtrend are improving. Within the big downtrend channel from the highs we can see a much less steep channel which the price has been stuck in for almost 2 years. This channel is showing some convergence, which is a positive sign. Watch for a breakout from both of these channels which would signal the birth of a major new uptrend, but until that happens there is some risk of a further drop to the strong support in the $1000 area. A point worth keeping in mind is that gold of course looks a lot better when charted against most other currencies

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