What is the very big picture of spot Gold telling us, if anything? That there is a very bullish outlier scenario that could be unfolding…
We can make the case that all of the action from 2013 through mid-April 2017 is a base-accumulation formation that concluded the major corrective period from the September 2011 high at $1921.50 into the December 2015 low at $1046.20.
The huge base formation is pushing up into and against the 2011-2017 down trendline, which cuts across the price axis this week at $1295. If the major resistance line is hurdled and sustained– and it is a BIG IF– then all of the potential power of the huge base-accumulation formation will be poised to propel price up into and through a remaining resistance zone at $1375-$1388 to complete the rounded base period. This would trigger a measured upside follow-through potential to $1580 and possibly into the $1700 area thereafter.
What might the financial world have to look like for such an “outlier” bullish scenario to unfold? Certainly, a much higher, almost acute, fear of the unknown if geopolitical tensions ratchet up to unprecedented levels, which could be accompanied by Fed back-pedaling on rate hike normalization that unleashes concerns that precious metals asset inflation is in full gear to the upside…
A lot has to “go right” for such a bullish scenario to unfold in Gold, but the potential appears to be developing right in front of our eyes.
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