Emerging Chart Pattern Could Send Gold To $2,124

The gold chart has formed a potentially bullish giant symmetrical triangle pattern that could send the yellow metal to a new all-time high of $2,124 an ounce.

The symmetrical triangle pattern

This type if chart pattern is typically formed after a big move up or down, when neither the bulls nor the bears are able to gain control. The result is a market that drifts sideways forming a series of lower highs and higher lows which form a contracting wedge pattern often referred to as a coiled spring.

It has been estimated that around 75% of symmetrical triangle patterns result in a continuation of the prior trend, and as this first chart shows, the prior trend was up. In fact, gold has risen in value every single year for the past 11 years, returning an average of 17.7% per year.

A 2.5 Year Chart Of Gold

Chart courtesy of stockcharts.com

This second chart shows the pattern in more detail and also shows the price target for an upside breakout. This is calculated by measuring the distance between the widest two points of the pattern (green arrow), and adding it to the breakout price.

An 18 Month Chart Of Gold

Chart courtesy of stockcharts.com

A breakout from $1,725 would give a price target of around $2,124 an ounce, however the ultimate direction of the breakout won’t be known for certain until it occurs. For those interested in following this pattern, here is a link to the chart.

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