Gold Completes 5-Year Breakout Pattern

The SPDR Gold Trust has lifted quietly to five-year trendline resistance at $130 ($1,380 on the CME Globex futures contract), bucking headwinds from a more hawkish Federal Reserve that is expected to raise interest rates three to four more times before the end of 2018. This bullish price action completes a multi-year basing pattern, with a breakout confirming the first major uptrend since 2011.

A gold breakout is likely to coincide with inflation data rising more quickly than expected, forcing the Fed to play catch-up. That could happen in the dreaded stagflation scenario, in which trade wars slow world economic growth while commodity, industrial and consumer prices rise rapidly due to protectionist and retaliation policies. Gold could also attract aggressive buying pressure if U.S. talks with North Korea fail in May, which is the most likely outcome. (See also: Gold Price Forecast: Correction Dependent on Risk Recovery.)


The SPDR Gold Fund has completed a multi-year basing pattern that may generate a major breakout in the second quarter. …read more

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Category: GLD

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