As mentioned previously, Gold prices broke out of a triangle consolidation pattern and now appear headed to their price projection target of $1,000 per ounce. Let’s see how this is possible.
First, gold prices have clearly entered a consolidation pattern, no matter how you draw the trendlines. Price swings are overlapping and truncating at closer prices as the swings narrow. The moving averages became flat and have now turned back to the upside in the ‘most bullish orientation’ possible.
Gold broke above the upper trendline around $900 per ounce, and then confirmed the break with a ‘throwback’ retracement that tested and held the rising 20 period moving average as well as the break-out zone.
The price projection estimate comes from the height of the triangle (roughly $100 per ounce - from $850 to $950) which is then added to the break-out point just above $900 per ounce which gives a price projection target - if the triangle is valid - to just shy of $1,000 per ounce, which would take price back to its all-time closing high, less than $40 away.
Whether or not we meet our target, gold prices appear to be rather bullish in this environment of economic uncertainty, so be sure to keep a watch on this precious metal, which is also known as a safety place for investment in inflation and uncertain times.
