Completing the Handle

The gold price has gone up by several percent since late February when I last wrote about it. I thought back then that gold would find resistance at $2000, but it broke through that level without any trouble. The resistance appears now to be at the $2100 level. Yesterday, gold traded above $2060 before falling back to about $2010 where it's currently trading.

Monthly gold chart from late February

We're again seeing a face-ripping reversal that will have day traders licking their wounds. However, nothing has changed as far as the chart goes. We have support at $1900, and the fundamentals look good. Even if the war in Ukraine ends, we have massive inflation to worry about. Those still looking to buy gold should do so now, before the the gold price completes the handle at about $2100.

My target for 2021 was a gold price somewhere between $2000 and $2100, so it appears that I was only a few months off in my forecast. As for the break out above $2100, I expect it to happen before the end of this year. There's a few more months left for people to accumulate gold before we're set for a ride to $3000.

As for physical gold, my local bank has adjusted the price of their coins up another notch. Supply is visibly strained, with very little to choose from. It appears that people are waking up to the safe haven asset, and that they want to hold the metal in their hands rather than let some banker take care of it in an ETF or similar paper contract.

Rococo Cup with handle

By Vincennes Porcelain (France, circa 1739–1756), Francois Binet (France, active 1750-1775, born 1731) - Image: http://collections.lacma.org/sites/default/files/remote_images/piction/ma-31852871-O3.jpg Gallery: http://collections.lacma.org/node/229367 archive copy, Public Domain, Link