I looked at the price of gold since March 6, 2009, that fateful day when the Dow fell to 6400, and heretofore the low point of the recession from which we can't seem to recover.
Rather than draw trend lines, I decided to look for natural boundaries, such as moving averages. Data dredging, if you will.
The 145-day moving average, which, granted, you never hear about, nonetheless seems significant. Gold has not yet gone below it. Rather, it has bounced off of it emphatically 4 times (and just missed it another 3 times) in the last 2 1/4 years. If gold were at its 145-day moving average right now, it would be at $1419.89. We're pretty far from there, which is encouraging. Looks like, even if gold were to have a $100 decline this summer, you shouldn't panic, but rather back up the truck.
What about upper bounds? Over the past 2 1/4 years, the upper 5% envelope of its 20 day exponential moving average has been almost perfect. It's bounced off of it too many times to count. Gold would have to be at $1592.36 today to touch it, at which point shorting would probably a really good idea.
Next, I wanted to look at a monthly chart of gold for the duration of its latest secular bull, the beginning of which I deemed the month gold broke $300 for good. Looks like we're quickly approaching the vertex of a rising wedge that began in 2008. Technically, that's bearish, or so I've read. But bullish or bearish, whichever direction it turns, it certainly looks to me like this summer will mark a violent entry into a new phase.
* Update: Those of you with nothing to do may be interested in my revised interpretation of the monthly chart.
In the new chart below, I've drawn a red dotted line, which has been long term resistance for gold, and I see no reason why that should change. Gold touched the red dotted line in 2003, then not again until summer 2006. Looks like a similar thing may be going on 2008 --> summer 2011. The 1.5 year RSI is over 70 again, and if the pattern repeats, looks like it will approach 80 in the coming months, before a serious correction.
I've also drawn a new rising wedge, with this in mind: in March 2008, gold tested the red dotted line, then closed the month down about 7.5% If we start the blue trend line from that point, we see that the wedge was broken to the upside in April. Rising wedges are supposed to be bearish, but then I think that's in an overall bear market.