Although gold remains on the defensive following its latest breakdown, the longer-term outlook remains very good. We can see why on the 2 long-term charts shown below.

On the 14-year log chart the retreat from the 2011 highs still looks like a correction within an ongoing major uptrend – which is not an unreasonable interpretation given that they have not stopped printing money. Gold looks like it has been basing over the past year above its long-term uptrend line, and at this point it looks like the support level at last year’s lows at about $1180 will hold, although there are reasons why we could see near-term weakness towards this support that we will consider shortly.