-- Posted Friday, 4 September 2009 | | Source: GoldSeek.com
The current snapshot (as shown above) gives good reason for an earnest consultation of the historic record (as displayed in Pete’s timely August 19th chart below) to see what this price-pattern breakout now likely portends for the foreseeable future…
PG View: As discussed in my initial post, breakouts from symmetrical patterns more often than not come in the direction of the dominant trend. The pattern was indeed violated to the upside on 02-Sep and prices extended higher to pressure the June highs at $989.59, the last significant barrier ahead of $1,000.
Initial objectives based on triangle breakouts are derived by measuring the base of the triangle and projecting from the point of the breakout.
For example, the base of the previous significant triangle is defined by measuring from the May-2006 high at $730.20 to the $541.90 corrective low in Jun-2006 or $188.30. The breakout of the pattern occurred in Aug-2007 around $675.00. Add $188.30 to that point and you had an initial objective of $863.30. A price that was reached in Jan-2008. In fact, gold ultimately reached $1,032.20 in Mar-2008, nearly twice the magnitude of the initial projection.
The base of the most recent triangle is defined by the $1,005.42 peak from Feb-2009 and the $864.60 corrective low from Apr-2009. The base measures $140.82. The point of yesterday’s breakout was around $966.00. - Peter A. Grant, Sr. Metals Analyst
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-- Posted Friday, 4 September 2009 | Digg This Article
| Source: GoldSeek.com
