So, this week was an excellent week for gold stocks. The XAU was up almost 8% for the week, Gold Bullion tacked on about 12 bucks, and, as forecasted on August 19th, the Euro rose while the US Dollar fell.
Gold stocks were so strong that one index I follow, the S&P/TSX Global Gold Index, formed a powerful morning star formation. I explain why this pattern is so reliable and profitable here. You really do have to look at the chart carefully, or else the pattern can slip by you.
In the above daily candle chart, you can see that every island that has formed so far, has led to a major change of trend. Although this island reversal we have just experienced does not guarantee a change of trend, I think it puts the odds strongly in our favour.
One other thing to note, these island reversals would never be visible on the XAU or HUI charts, since gaps rarely appear on these charts. To see these patterns, it is better to look an ETF, such as XGD, or GDX.