Fallen Triangular Wedge: Gold to Re-test >1610 Soon

Gold finally broke out of its long consolidation not too long ago into a new leg. This new leg was pushed ahead by US-Iran conflict which has mostly abated (for now, supposedly), however, many other micro/macro economic factors remain permeated into the market that will continue to push precious metals indefinitely higher from 2020 and beyond, such as: 1) weakening economic data, 2) monetary policy easing, 3) expansive balance sheet, 4) technicals leading to a precious metals bull run, 5) inflation and 6) weakening world currencies. Most recently, the jobs report in the US remained somewhat weak which should support more bullish volume into Gold and thus a near-term break-down below 1540 should be avoided.

Gold formed a shooting star to roughly 1610 and eventually formed a fallen triangular wedge to roughly 1544/1545 however what remains are a few key points. 1) Gold bounced off 1547 which was the price this past Friday prior to the Iran news, 2) Gold bounced off 1551 which was the price this past Friday after futures and 3) Gold remains higher than 1556 which was the 2019 peak. These three price bounces could lead to an eventual bullish break-out yet again over 1610 in the near future.

Technically, a fallen triangular wedge into consolidation into a cup is an extremely bullish pattern and often leads to record highs (in this case, over 1610), anywhere from 1-3 weeks from the time the peak was formed. As a result, as long as Gold closes AT OR ABOVE 1544, the trend remains extremely bullish.

SL at 1540-1544 based on individual assessment of risk.

- zSplit