In May, I told you the next gold rally had just kicked off.
However, since my essay, gold has gone nowhere. The metal is only up around 2%. For comparison, the S&P 500 is up around 5% in the same timeframe.
But that's about to change. Gold is setting up for a big move higher...
Take a look at this chart of gold...
Gold is trading above both its 50- and 200-day moving averages (DMAs). These lines should provide support and limit any downside action in the metal in the short-term.
The metal's next significant resistance level is up around $1,380. That's about a 5% gain from today's gold price. But gold is setting up for a much larger move...
The chart has developed a long-term inverse "head and shoulders" pattern.
The left shoulder forms when an asset hits a low point and then rallies. The head is made when the asset drops to a lower low and then rallies back to its previous high. The right shoulder forms when the asset drops back down and makes a higher low.
This is how bear markets change into bull markets.
If gold can rally above the "neckline" of the pattern at about $1,380, the projected target is up around $1,600 per ounce.
In the next week or two, gold may pull back and test its 50- and 200-DMAs. But the long-term picture for gold is still bullish. Traders should use these pullbacks as opportunities to buy. It looks like the metal is headed much higher.