Gold follows through

In a report from May 18, we looked at what happens when gold crosses above its 200-day average after months below it. There was a solid correlation between its returns over the next two weeks and returns a year later. Gold has continued to rally since that cross, lowering the probability that this will be a failed breakout. For gold miners, the NYSE Arca Gold Bugs index has consolidated into a flag pattern (most technicians would consider this a positive) but is at almost the exact same level it was at 10 days ago, so no solid conclusion there.