GUNDLACH: Gold's chart has 'one of the most bullish' patterns around
AP Photo/Richard Drew
The precious metal has rallied almost 3% since the news broke on Tuesday morning and is now trading at its best level in more than two months.
And there may be more gains ahead, according to Jeffrey Gundlach, the founder, and CEO of DoubleLine Capital. "Cramer today was positive on a stock pointing out its "cup and handle" chart pattern, one of the most bullish. He's right. Gold has one too," Gundlach tweeted.
To be clear, Gundlach has not made a specific call for gold, and he has not specified what time frame he is looking at on the chart.
However, taking a look at the gold chart, it appears Gundlach is talking about the action over the last year or so in the precious metal.
A cup and handle pattern is such that an asset makes a run at previous highs, fails, and then proceeds to test those highs again over a much shorter time frame. The pattern is triggered on a breakout above the highs, which is also known as the neckline.
Have a look:
Business Insider/Andy Kiersz and Jonathan Garber, data from Bloomberg
Now to be fair, while it does look like the pattern is taking shape, it has not yet been triggered with a breakout above the neckline. However, should that break out come, it looks like gold has a bit of room to run. Measuring from the late 2016/early 2017 low up to the neckline is good for about $166 ($1,294-$1,128). Add that $166 to the neckline ($1,294) and you get a gold target of $1,460, a move of almost 14% above its current price of $1,284.
That surely seems reasonable should the back and forth between Trump and North Korea go on for much longer.
Get the latest Gold price here.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas