Recently Gold broke upwards out of a classic Edwards and Magee style falling wedge. Often these patterns retrace with a rounding down towards the breakout but the strength of this move not waiting around for that only emphasised this advance means business.
The upside target of the falling wedge is the point where it started. In this case that's $1433 in spot gold. That's the minimum target. Another possible scenario is that the larger picture is forming a head and shoulders bottom with a neckline as shown above with a breakout currently around 1410. should the 1433 point be breached decisively that would imply a further approximately $280 rise to around $1700. I have to admit my view has been that gold is in a longer-term bear market but breaks of 1410 and 1433 would certainly change my view if sustained.
Volume and open interest appear to be increasing as the market rises which is another sign this is a market accumulating longs not covering shorts.
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