Gold is consolidating beneath its recent all-time high and in doing so it looks to be forming an Ascending Triangle Pattern which could result in a breakout to $2,223 an ounce by the end of November.
In technical analysis an ascending triangle pattern is a continuation pattern meaning that it represents a period of consolidation followed by a continuation of the uptrend. This type of pattern develops after a market runs into resistance and then goes into a sideways consolidation. A series of progressively higher lows develop as the bulls gradually gain control which leads to a breakout to new highs. Traders will look to trade this move as it breaks above the upper resistance line.
The target for the move, once the breakout occurs, is calculated as the distance between the start of the pattern and the upper resistance line. This is then projected upward from the upper resistance line, and in the case of gold gives us an upside target of $2,223.