Mastering the Art of Chart Analysis: Gold, Silver, and Oil Unveiled
When it comes to navigating the world of commodities like gold, silver, and oil, knowing how to read the charts isn’t just a bonus—it’s essential. In a recent deep-dive discussion with renowned chart analyst Patrick from Northstar Bad Charts, we explored real-time movements, breakout points, and long-term trends to uncover where these markets might be headed next.
📈 Gold’s Breakout: A Technical Masterclass
Gold is currently in breakout mode—and traders are paying attention. According to Patrick, gold is sitting above critical moving averages: the 12-month and 36-month (or 3-year) moving averages. This signals a confirmed uptrend on the monthly chart. But not all breakouts are equal.
Patrick explains the importance of distinguishing between angular and horizontal trend lines. Angular trend lines are the early signalers, indicating that momentum may be shifting. However, horizontal lines—previous support turned resistance—hold more weight. These “walls,” once broken, validate the strength of a trend.
Right now, gold is testing such a wall. A backtest followed by a continued push upwards could signal the start of a major move. However, Patrick warns traders: low-risk entries are becoming harder to find as prices stretch away from moving averages.
“You can’t expand infinitely without consequence. When the price stretches far from the mean, a reversion—or at least a sideways movement—is more likely,” Patrick explains.
⚠️ Risk & Reward: Stretching the Limits
While gold is technically strong, it’s also “stretched” on the higher timeframes. That means new entries come with higher risk. Patrick advises that the time to enter was during the last low-risk setup—close to the moving averages and right after the last horizontal breakout.
If you’re already in the trend, the advice is simple: hold until you get a monthly close below the 12-month moving average. But jumping in now requires caution, as the potential for a short-term pullback or sideways correction increases the further price moves from its base.
🥈 Silver: Strength Building, But Resistance Looms
Silver, meanwhile, is showing early signs of strength but hasn’t quite broken out yet. It’s hovering just below critical resistance around the $33–$34 level. Patrick emphasizes the importance of waiting for a monthly close above that zone before declaring a true breakout.
Silver’s uptrend is still intact on longer timeframes—above both key moving averages—but for the next leg higher to begin, it needs to break through this major resistance. Traders should watch for volume confirmation and tight coiling near that level to spot the next move.
🛢 Oil: Bullish Structure, But Not There Yet
Oil is the outlier in this trio. It’s showing some bullish consolidation patterns—like classic pole and flag formations—but it hasn’t broken out on the higher timeframes just yet.
Despite mid-month bullish wicks, oil closed below the three-year moving average, and Patrick emphasizes that a breakout above $82 is needed for the bulls to truly take control.
Still, there’s excitement brewing. USL (United States 12 Month Oil Fund), which smooths short-term volatility, shows a tight coil that could burst into a powerful move. But like a lion stalking prey, Patrick urges patience:
“Let the gazelle get tired. Don’t chase. Set your alert and wait.”
📌 Key Takeaways
- Gold is in a confirmed uptrend but stretched—expect possible sideways action or backtest.
- Silver is gaining strength but needs to break above $33–$34 for the next big move.
- Oil is forming a bullish base but hasn’t broken resistance—watch $82 for confirmation.
🎯 Final Thoughts
Whether you’re a long-term investor or short-term trader, this review underscores the importance of multi-timeframe analysis and understanding where the real low-risk opportunities lie. Don’t chase breakouts blindly. Instead, study the chart, wait for confirmation, and let probability—not emotion—guide your trades.
For more insights, you can follow Patrick at @BadCharts1 on X (Twitter) or visit NorthStarBadCharts.com for advanced technical charting tools and education.
