Bottom in Place for Gold

posted in: ECB, Gold | 22,326

This morning’s gold rally has formed a highly significant breakout from a multi-month chart pattern bottom:

Gold_Inverse_H&S

A textbook head & shoulders bottom has formed during the past several months and this morning’s large move higher has formed a breakout above the neckline of this pattern. The measured move target for this breakout is ~$1325.┬áIt is interesting to note that I placed a $1300 near term target on gold two weeks ago when I highlighted the similarity between the current price action and the summer of 2012.

Meanwhile, the euro price of gold is surging 3.9% this morning on the back of the Swiss National Bank decision to remove the Swiss franc peg to the euro:

GOld_euro

This move marks a very meaningful breakout above long-term support/resistance near 1,050 euros/oz.