Gold Inverse Head and Shoulder Awaiting Breakout

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Based upon the current action in gold and gold stocks it appears likely that gold will continue to form a major rally.  The daily chart pattern has the appearance of an inverse head and shoulders that has yet to break the neck line.  From a time cycle and chart structure standpoint, it appears to me that the breakout is close at hand.

I do have a bias here in that I have call options on silver as previously stated on the blog here.  My expectation is that metals will continue higher for the rest of this month.  I feel that there was and is still a quality chance for an excess of 100% return on call options prior to expiration.  But for some added time for things to unfold, I think a March or April call option would be sensible as well.

A break in the metals above the December highs could be a technical chart point of recognition resulting in either a failed breakout, or in my expectation, a continuation of the uptrend.

Pete