Gold Inverted Head-N-Shoulders Suggests $2000+ Is Next Upside Target

After a moderately strong rebound from the $1675 lows in early August, Gold has clearly started to set up the Right Shoulder of what appears to be an Inverted Head-and-Shoulders pattern. The recent weakness in the US Dollar suggests any breakdown in the US Dollar below $91.70 will likely prompt a new bullish price advance in Gold targeting highs above $1900 and likely attempt to reach $2100 or higher.

WATCH $91.70 ON THE US DOLLAR FOR NEXT GOLD RALLY

Currently, the US Dollar is experiencing a few days of upward price trending after breaking downwards from highs near $93.70. Recent lows in the US Dollar, near $91.93 suggest a peak in the US Dollar may have set up. We believe the $91.70 level on the US Dollar is critical to the setup of the Inverted Head-and-Shoulders pattern in Gold and that Gold may trail downward to levels near $1775 before finding real support for the next upside price rally.

Once that Right Shoulder has completed, likely near $1775 or higher, the next phase for Gold is a very solid upside price rally that should rally above $1845 fairly quickly and attempt to reach the $1920 to $1950 level before the end of 2021. Many of you are familiar with a Head-n-Shoulders pattern and understand the end of this pattern usually prompts a rally equal to the Left Shoulder or Head breakdown range. This means the next rally phase for Gold will likely be a minimum of +$150 to $+165 from the Right Shoulder level.

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STRONG UPWARD SUPPORT NEAR $1765 SUGGESTS RALLY IN GOLD IS PENDING

Additionally, we wanted to highlight this Gold Monthly chart pattern that suggests a strong upside price channel and a Double-Bottom continue to confirm a very strong potential for an upside price rally in Gold. The CYAN upward sloping price channel suggests Gold will find a strong support near $1765 and the Double-Bottom suggests Gold has already confirmed a strong support level near $1695.

We believe the transition of the US Dollar throughout the end of this year will be key to understanding the type of rally we should expect in Gold and Precious metals. Once the US Dollar falls below the $91.70 level, the upside price pressure in Precious Metals should begin to accelerate. We believe the $91.70 level in the US Dollar is the key catalyst for Gold to break out of this Inverted Head-and-Shoulders pattern.

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