Gold Daily Chart: Cup and Handle Formation on Track
Courtesy of JESSE’S CAFÉ AMÉRICAIN
Gold set its low for the handle with an intraday spike down to 1166 compliments of the heavy handed bear raids ahead of option expiry, but put in the daily close at an almost perfect 38.2% Fibonacci retracement.
Since then gold has been rallying, breaking through the key 1200 level right after the expiration where so many call options had been concentrated.
It has already reached what might prove to be the upper bound of resistance for the handle, although I would expect it to be a rough go higher from here until a breakout is achieved.
The target of 1400 to 1450 looks good. As the breakout gains shape hopefully a minimum measuring objective can be calibrated more precisely.
Once gold starts moving I would not be surprised to see a breakaway gap that does not get filled, but leaves many punters on the sidelines waiting for a pullback.
The usual caution is that if there is a market crash and a liquidation panic, gold will be sold along with almost everything else, at least temporarily, but then should rebound strongly as the central banks act to bolster confidence and liquidity by devaluing their currencies even more aggressively tha they have already been doing.
Classic Cup and Handle Chart Formation
