Krauth: Gold’s Tight Trading Range a Prelude to Upside Volatility

The Wall Street Examiner  ( Original )
APR 16, 2018

Gold continues trading in a very tight, but ever-escalating, channel. The $1,360 area has been a monstrous level of resistance, but with ever-higher recovery lows and a macro environment tailor-made for gold appreciation, breaking through could lead to true upside fireworks.

Despite gold’s ups and downs last week, the precious metal continues to stealthily build a constructively higher price.

Although gold’s been moving steadily higher within its upward trend channel since early 2017, it does appear to be consolidating more recently within a sideways range, as you can see below:

That sideways trend has kept gold between $1,300 and $1,365 since the start of 2018. But that’s just a 4.5% trading range at current gold prices.

A recent report by Macquarie Research commodity analysts says they see precious metals as holding the best potential within the broader commodity sector, with gold prices rising into 2020.  The report cited the risk of higher inflation and a weaker greenback thanks to bloated U.S. deficits.

At this juncture, seasonal strength could push gold to $1,400 by summer, then tackle the $1,500 level by year’s end.

ORIGINAL SOURCE: Why the Price of Gold Is Heading for a Double-Digit Surge in 2018 by Peter Krauth at The Wall Street Examiner on 4/16/18