Our current operating target for gold is the mid to high 1500s and this beast seems to be setting its sights set on that now, rather than months down the road as I’d expected. This morning the futures are at 1505. It seems like only yesterday we took out 1400.
The most conservative measurement of this bottoming/bowl pattern breakout is 1570 per the weekly chart.
The monthly chart’s best measurement is to 1710. You can see the resistance below that roughly coinciding with the 1570 target. Targets are not stop signs, but they are there for a reason; to be able to project ahead to a new decision point.
The play is becoming overbought on all time frames, but as we noted in NFTRH 563 using this monthly chart of Gold/Euro (part of a daily, weekly and monthly chart segment for European subscribers’ perspective on the gold price) that is what bull markets do; they spending much time being two things… overbought and bullish. Look at the 3 overbought readings (RSI) in Au/EUR, the consolidations that followed and then the new upside surges.
It’s easy to get yourself put out of a bull market by mis-timing overbought caution points. So, is it a major bull market for gold or just a cycle doomed to fail below the previous major highs?
I think that Au/EUR is going to make a new high eventually. If so, would Au/USD follow? A major bull market has to start somewhere, after all.
We continue to manage the smaller cycle view because even there the targets – especially in gold stocks – are significantly higher. But with gold already in the 1500s it is time for NFTRH analysis to begin to compress time frames and bring into focus the minor/major bull market question a little more clearly. Things (both upside and downside potentials) appear to be on a more rapid time schedule than originally anticipated.
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