One indicator is now pointing toward a big surprise soon, however. If we pause a moment to look back at what gold did over the last four weeks, we see that it went a long way to go nowhere. Remember the big story at the beginning of June? Back then, we were talking about the newfound volatility that gold and silver were experiencing. After a nearly unbroken string of new highs over the first six weeks of the spring rally, the metals had settled into a more normal pattern of peaks and valleys.
Falling volatility can lead to rising prices The Bollinger Bands volatility gauge has been a fairly reliable technical indicator for asset prices in general and gold specifically. As long-time readers know, I track gold’s Bollinger Bands because when they narrow , that event often presages a breakout in either direction. Importantly, if the price is in an uptrend, this breakout is usually to the upside. And gold, as we know, has been in quite an uptrend.