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Technical Analysis: 3 Gold Price Charts Every Gold Bug Must See Lombardi Letter 2018-01-16 12:13:08 Technical analysis suggests that gold prices could have a good 2018. There are several bullish developments point in that direction Analysis and Predictions 2018,Gold https://www.lombardiletter.com/wp-content/uploads/2018/01/Gold-Analysis-150x150.jpg

Technical Analysis: 3 Gold Price Charts Every Gold Bug Must See

Gold Analysis

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Gold Prices Setting Up to Soar 25% in 2018

If you are not looking at gold, you could be making a big mistake. The yellow precious metal could have a stellar 2018. Don’t be shocked to see gold prices soaring 25% this year.

Over the past few years, gold has been severely ignored. It’s one of the only places where prices are not at their all-time high. However, this could change very quickly.

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From a technical analysis perspective, there are several bullish developments that shouldn’t be overlooked.

Please look at the daily gold prices chart below:

Chart Courtesy of StockCharts.com

Since mid-December, gold prices have been soaring. Now the price stands above its 50-day moving average and the 200-day moving average. At its core, this says that both the long-term and short-term trends are pointing upward, and that bullish sentiment toward the yellow precious metal is building up.

If you look at the momentum indicators, like the moving average convergence/divergence (MACD) and the relative strength index (RSI), plotted at the bottom and top of the chart, they are essentially saying that buyers control the price, and that they could take gold price much higher.

This Chart Pattern Suggests Gold Could Skyrocket

Now, look at the weekly gold prices chart, and pay close attentions to the lines drawn:

Chart Courtesy of StockCharts.com

You see, gold prices are forming a technical chart pattern called the “ascending triangle.” This pattern is formed when there’s a preceding uptrend and prices find resistance on the upside. This is around the $1,350 level.

If the gold price breaks above the $1,350 level, we could have a breakout at hand. This is when the price moves higher very quickly.

Know this: with every technical chart pattern, there are usually targets associated with them.

With an ascending triangle, if the price breaks above the resistance level, the price usually increases by a similar amount as the widest part of the triangle.

So in this case, the widest part would be the price action between December 2015 and June 2016—roughly $300.00. If we add $300.0 to the breakout point of $1,350, we could be looking at gold prices at $1,650. That’s about 25% above where the gold price currently stands.

The Very Long-Term Trend Remains Intact

Lastly, look at the very long-term chart of gold prices.

Chart courtesy of StockCharts.com

Remember, the trend is your friend until it’s broken. Look at the lines drawn on the chart above.

The long-term trend on gold prices remains intact, so the price could go much higher.

Also, pay close attention to the line drawn at the bottom of the chart. It’s the volume in the gold market. Notice something interesting?

Since the price of gold bottomed in late 2015, we have seen a massive increase in volume. This implies there’s interest in the yellow precious metal and that, with prices going higher, there are more buyers than sellers.

Where’s Gold Headed in 2018?

Dear reader, it seems everyone wants to own stocks, as their valuations are through the roof.

I can’t help but call gold the most undervalued asset at this time. As bold as this may sound, gold prices could be making a solid run toward the $2,000 mark in 2018.

However, it’s not just the technical analysis which suggests that gold is worth a look. The fundamentals paint a very rosy outlook for the yellow metal as well.

With all this in mind, I am looking very closely at gold mining stocks. If gold prices soar, mining stocks could be the next big wealth generators.

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