Gold Rally Underway. How Far Can It Go?

With Gold having confirmed a breakout on Thursday, the question to ask now is how far can it go. I wrote here about the large commercial long positioning and the Gold/Silver ratio, both of which suggest a significant low for the precious metals is in.

So we need to look to the weekly chart to see the bigger picture. Price has been forming a nice big rounding base for the last 5 years and given the positioning, I'm expecting price to rally up to resistance ~1,360 - 1,400. If price can move above resistance, the target from the rounding bottom is 1,750.

That said, the saying goes, the bigger the base, the higher in space. So should a breakout confirm after a basing pattern of 5 years in length, whilst 1,750 should be the first target but there may be potential for a larger move.