bull flag forming

Gold continues to bounce around between 1720 and 1730 and appears to be tracing out a "bull flag". This is where the price rises quickly (the "flag pole"), then consolidates with a gently downward sloping correction (the "flag"), before rising quickly again, generally for the same distance as the "flag pole" rose.

We can see that the price rose quickly from 1673 to 1738, which gives us a "flag pole" length of 65 points.

If we assume that the low for our bull flag is in at 1718 (though I would not be surprised to see a correction to 1713, being the 38.2% retracement of the "flag pole" move), then this gives a target for the bull flag pattern of 1783. This is right inside the major resistance zone that extends from 1780 to 1800, an area that must be overcome to see the shorts running for cover and the price start to move higher at an accelerated rate.

So, our "bull flag" pattern tells us that we could see a quick move up to 1783 before finding some resistance and potentially a small pullback before an assault on 1800. Clearly this is based on current information which can change at any time.