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Did Gold Just Double Bottom?

By Andrew LaneCommoditiesApr 01, 2021 06:16AM ET
www.investing.com/analysis/did-gold-just-double-bottom-200570739
Did Gold Just Double Bottom?
By Andrew Lane   |  Apr 01, 2021 06:16AM ET
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Putting to one side the bearish headlines of “worst quarter since 2016” and what seems to be the endless narrative of “Bitcoin taking Gold’s market share” something technically fascinating just happened in gold, and this should be viewed as extremely bullish.
 
Looking on the daily chart, on Mar. 9, 2020, Gold closed at 1678. The following sessions sparked the dash for cash from the COVID collapse and gold was smashed down to an intraday low of 1450, before the Fed intervened with interest rates and liquidity and the markets bounced back strongly.
 
Fast forward to Mar. 8, 2021 and gold hit an intraday low of 1677 closing at 1682 rallying a few days later to an intraday high of 1752. On Mar. 30, 2021 gold made an intraday low of 1678 before rallying back the next day and closing at 1707. Today we are in the green again on gold as it surges above the all important bottom end 1711 fib retracement zone. On the charts this shows a double bottom. The Mar. 9, 2020 high has been tested twice and support has held. If we rally and close daily above 1752 in the coming sessions this should confirm a double bottom pattern on the charts. It is also worth noting this is the lower level of a large support cluster tested several times during April, May and June 2020—each time it held. This is huge support
 

Gold Daily chart
Gold Daily chart

When we consider the chart pattern gold has made on the weekly chart, it is a textbook cup and handle formation that has played out over the last decade. For those that aren’t aware, the cup and handle formation is one of the strongest chart patterns, and with the handle looking like it is now complete, the uptrend looks set to continue.

Gold Weekly chart
Gold Weekly chart

If we carry out Fibonacci extensions from the March 2020 lows to the 2020 highs to the present lows, it projects a 100% measured move to 2300. If this double bottom is verified in the next week or so of April we may be entering the next leg up to this level. The next few trading sessions will be critical for this pattern to play out. 

Did Gold Just Double Bottom?
 

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Did Gold Just Double Bottom?

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Comments (2)
Ahmed Elgeldawi
Ahmed Elgeldawi Apr 02, 2021 10:10AM ET
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Hello Andrew, Did you watch the videos of Andrew Maguire (live from the vault) recently as he expects that the gold price could rise to 10-15k dollars an ounce in 2023?, Do you believe this could happen after implementing Basel 3 and Basel 4?, I hope you could answer.
Andrew Lane
Andrew Lane Apr 02, 2021 10:10AM ET
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Hi Ahmed. I believe the NSFR will cause Gold price to rise, however putting a figure on what it could go to is extremely difficult as this is such a one off event
Mehdi Captain Music
Mehdi Captain Music Apr 01, 2021 7:29AM ET
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It’s early for gold to rise. With all your data on your chart, there is a dip between 1500 to 1600 that needs to be retest. And also dollar index is rising to near to 94. I hope people didn't invest in only one basket.
 
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