The breakout of a triangle pattern in 2012 indicates a bullish year for gold in 2013. Triangles are
traditionally continuation patterns, and the upside breakout indicates it is quite likely there is another higher wave already underway in gold. Based on the dimensions of the triangle, the long-term target is $2,080 for gold futures. Most of this advance is likely to occur in 2013.
 |
| Figure 6: December gold futures chart. |
| Image Courtesy:thinkorswim |
In the meantime, $1,800 has posed a significant
resistance. The price will need to get through that area before the target can be reached. An inability to clear resistance and a drop below $1,523 indicates the price is likely to slide lower.
Gold is also tradable through the
SPDR Gold Trust (ARCA:
GLD). The target for the ETF based on the triangle is $195. A drop below $148.25 is bearish and indicates a potential longer term decline into the $113 region. Resistance is between $175.46 and $174.
