There has been a serious lid on gold price rallies for three years now. But with every attempt at breaking through the $1,360-$1,375 level, the subsequent low gets higher.
This is what is generally referred to as a ‘coiled spring.’ Buying pressure steps in, again and again, at higher and higher lows. Eventually, that pressure meets the selling at the top end of the range.
Gold prices have chopped higher since bottoming in December 2015. The move has not been as exciting as precious metals bulls would like but it has followed a trend of higher lows nonetheless.
During the same time frame, Gold has tested the $1360 – $1375 price level on multiple occasions – see resistance line at (1). This action has created a compression pattern that is creating pressure to the upside. This pattern is known as an ascending triangle and would be very bullish for gold IF prices can breakout ABOVE current resistance at $1375.
If gold does break out to the upside, a measured move price objective of $1796 could be reached – see line at (2).
If Gold would happen to break above resistance, it would send a bullish message to Gold bulls they haven’t seen in the past 5-years! What gold does at (1) will be important for Silver and Gold mining stocks!