Gold: Upside of 19% in next few weeks

Posted by Ross Clark - ChartWorks

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Gold: The World’s #1 Asset Class

The current tension in financial markets is providing an additional lift to gold prices.  Targets based upon the 1980 to 2007 consolidation continue to point to levels above $2,000.  In the short term, the mid-March bottom suggested strength would be seen through late-May or early-June with a pause at the 7/8th speedline.  Previous April-May rallies have concluded with daily RSI(14) readings of 79 to 85 (currently 72) or upside Exhaustion Alerts caused by a solid week of urgency in buying pressure. The pullback to test the breakout of $1160 on May 4th and 5th alleviated the ‘urgency’ leaving the market free to rally once again.

Upside targets for the next few weeks start at $1236 with the most common advance being 19% ($1290) from mid-March, but surprises could be to the upside so we recommend waiting for overbought readings before lightening up on trading positions.


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