Gold Makes Highest Weekly Close – Near Upper Bollinger Band

They say the trend is your friend until the end. And if you look at gold’s weekly closing prices, the trend is still up. After a 21% drop earlier this year, the gold price just made its highest ever weekly close. That’s its second consecutive close back above $5,000 per ounce since the dip. The price is also hugging the top Bollinger Band each week – a sign of a strong uptrend in motion.

Gold and the top Bollinger Band

Bollinger Bands widen when volatility rises and narrow when it contracts. When the price closes near the top band, it’s essentially stretching them wider. Put differently, gold’s volatility has been expanding as price continues moving higher.

That’s a sign of a strong upward trend in motion. So long as gold keeps closing weekly candles near the top Bollinger Band, that trend is still intact.

Why buying gold could be risky now

Gold’s upward trend may well continue. But the stronger the trend gets, the bigger the risk of a major pullback. If you’re looking to buy gold here, think of Icarus flying too close to the sun.

The time to jump on the gold train was earlier this year after it dropped. Not when the train has already left the station and is racing at full speed.

A weekly close back below $5,000 would be a sign that the train is coming to a halt.

Nothing here is investment advice. Check out my Bollinger Bands guide to learn how to use them in your investment strategy.