A rise in the gold price above $1,375 [would] confirm that the bull market is on…[and that would] likely cause prices to rise really fast once…[that happened].
The original article has been edited here for length (…) and clarity ([ ]). For the latest – and most informative – financial articles sign up (in the top right corner) for your FREE tri-weekly Market Intelligence Report newsletter (see sample here)
Below, is an important gold chart that I am tracking:
I have marked two fractals (patterns) 1 to 5, to show how they might be similar. I have also marked the point where interest rates peaked (in 1981), and where they probably bottomed (in 2016).
If the comparison with the 1980s pattern is justified, and the current pattern continues in a similar fashion, then gold will continue in a long bear market. However, there are just too many fundamental obstacles to such a scenario (interest rates being one of them), since gold appears to be ready for the next phase of the bull market which started around 2000.
- A breakout at the top purple line (the high at point 5 – $1,375) would almost certainly…confirm the bull market [and this]…divergence from the 1980s pattern…[would] likely cause prices to rise really fast once…[that happened] (when dealing with fractals, the biggest price movements occur when two fractals diverge). This, in my opinion, is the most likely outcome.
- A breakdown at the bottom purple line could mean that prices will continue to follow the 1980s pattern, and go lower than $1000 which would mean we will have to wait many years (even a decade) for the next gold bull market (very unlikely).
…The big bullish wedge highlighted [in the chart below]…[shows that] price has already broken out of the wedge (early 2016), as well as retraced to that breakout area.
If the bullish wedge is to be valid, then price needs to spike soon.