SAMT Blog
"This is gold, Mr. Bond"
05. November 2023, by Ron William
Technical Analysis
“This is gold, Mr. Bond. All my life I’ve been in love with its colour…its brilliance, its divine heaviness.” An infamous line from the antagonist Auric Goldfinger, in the illustrious Bond movie series by Ian Fleming, aptly personifies an appreciation of all things gold following its latest 10% surge. It has re- tested the $2k glass-ceiling, amidst heightening geopolitical tensions, while also breaking historical macro correlations with real bond yields.
In behavioural terms, the yellow metal is reactivating a 13- year bullish pattern that visually resembles a “cup and handle” (C&H), where the cup is in the shape of a curved basing formation, symbolising trading accumulation, and the handle, which is typically marked by either a sideways or downward consolidation, that leads to the upside breakout signal.
The C&H pattern, originally popularised by veteran investor William O’Neil in his classic 1988 book on technical analysis, currently signals a minimum price objective of $2700, with overshoot risk into $3k (Figure 1). What makes this pattern of greater significance is that, if/once confirmed, it will reverse a previous widely acclaimed triple top signal, near $2070, that would have attracted much bearish consensus.
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