All markets go through the same phases from consolidation to blow off; the metals are no different. For months, gold languished in the consolidation pattern churning between $1,180-$1,220. Three weeks ago today, it broke out right to blow off.
Since its blow off, gold settled and resolved the blow-off pattern by consolidating once again but at much higher levels. The phase that gold missed was the trending to breakout phase, which it’s in right now. As gold starts to trend higher, it is forming an ascending triangle near the $1,240 level.
Gold should break out here in the next few days and start trending higher to our next target of $1,275. There appears to be a lot of underlying strength now as gold has switched from weak to strong. Gold is in an ideal position to continue to the run to the upside and the lows appear to be in.
