Gold ended the week flat, again closing at $1,291 per ounce. Its daily chart is forming a consolidation pattern (see the following chart).
This pattern, called a “pennant,” generally precedes a breakout to the previous trend—in this case, the uptrend that started at the beginning of 2019.
Analysts at Bloomberg see this coming, reports Kitco News:
“The gold market gauge is turning from bear to bull, with the metal most likely heading higher towards $1,400, according to Bloomberg Intelligence (BI).
“Gold will not be stuck around the $1,300 level for much longer, with the market waiting on peak U.S. dollar and more volatility in the equity space to push prices higher, said BI senior commodity strategist Mike McGlone.
“‘Stuck close to $1,300 an ounce in 1Q, gold is set to head for resistance at $1,400 instead of continuing to consolidate and revisit $1,200. It’s been six years since gold traded above $1,400 vs. just a few months ago when it was below $1,200, yet headwinds are dropping fast, with a lofty dollar the primary remaining holdout,’ BI’s April report stated.”
Rick Andrews is president of Avant Capital Management