Weekly Gold Price Charts Foretell a 25% Increase
If you are a gold bug, it’s important that you pay close attention to gold price charts. They are foretelling that something big could be in the making, and that 2018 could be a stellar year for the yellow precious metal.
One chart that gold bugs need to pay attention to is the weekly gold price chart. Look below and pay close attention to the lines drawn.
Chart courtesy of StockCharts.com
On the weekly gold price chart, we have been seeing a technical analysis pattern forming since 2015 called an “ascending triangle.” This pattern forms when there’s an uptrend but the price finds it difficult to pass beyond a certain resistance level.
You see, technical analysts see this pattern as a bullish pattern and expect price escalation once the resistance level breaks.
With gold prices, we notice a lot of resistance between $1,355 and $1,375.
Given what’s happening these days, including uncertainty from the Federal Reserve, President Donald Trump starting a trade war, and the U.S. dollar declining, it wouldn’t be shocking if investors rush to safe havens and gold prices soar.
Now, the big question: How high could the gold price go if it breaks above $1,375?
To predict where gold prices could go, technical analysts take the widest part of the triangle and add the length above the breakout level. In the chart above, the widest part of the triangle is between December 2015 and July 2016; it’s roughly $300.00 wide.
So, one could say that, if gold prices are able to break above the $1,375 level, we could set a target price of around $1,675. That’s roughly 25% higher than where it currently trades.
This Indicator Says Gold Could Be Setting Up to Skyrocket
Look at the chart below and pay close attention to the blue line.
Chart courtesy of StockCharts.com
This is a long-term chart, and the blue line represents the 50-month moving average of gold prices.
The 50-month moving average has been a great indicator of where gold prices could be headed. In the chart above, when gold prices crossed above the 50-month average, we saw a massive move to the upside.
Volume Could Be Worth Watching Closely
In mid-2017, we saw gold break above the moving average, and it continues to remain above it. At its core, this says gold could be setting up to skyrocket, just like it did after 2002.
Lastly, gold bugs should pay attention to the volume. In both of the charts above, volume is plotted behind the gold prices.
At the very least, we are noticing a lot of volume in the gold market, especially since gold prices bottomed in 2015.
What does this mean? It means there’s a lot of activity, and generally, there have been more buyers as the price has increased. This is bullish.
What’s Ahead?
Dear reader, it’s impressive how gold continues to get ignored. I can’t stress this enough: the yellow precious metal could be presenting the opportunity of a lifetime. The way I see it, it’s hands-down one of the most undervalued assets out there.
I also can’t stress enough that gold mining companies seem to be trading for pennies on the dollar. If there’s a bull run in gold prices, these gold miners could generate a lot of wealth for investors.