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business newsAn Acceleration in Gold Has Begun
Expect gold to break $2,000 an ounce in the next 18 months, with a parabolic rise possible.
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In the chart below we show four different but parallel trendlines. Trendlines 1 and 2 contained the bull market from 2001 to 2005 while trendlines 2 and 3 contained the bull market from 2006 to early 2010. Since then the market has tried to break and hold above trendline 4. It happened in April of this year, and the recent low was a successful retest of the breakout. Secondly, we’d like to point out the strong Fibonacci targets at $1,820 and $2,300.
The next chart is a zoomed-in look at trendline 4, which connects the 2008 and 2009 highs and the June 2011 low. The top indicator is a volatility indicator. If it breaks higher then it could signal the start of parabolic move. Gold now has strong support at $1,580 to $1,600. A $100 or even $150 pullback wouldn’t change the current state of acceleration.
Sentiment has become more bullish, but that is only a reflection of an acceleration in a raging bull market. More and more will pile in and the trend accelerates but so to does volatility. Readers are advised to increase positions on pullbacks and to consider the gold and silver shares which are setting up for a fantastic 2012 and 2013.
Editor's Note: See more of Jordan Roy-Byrne's content at The Daily Gold.
Twitter: @trendsman1
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