Good Morning!

Gold is consolidating bullishly, albeit remains far above its 150-day and 200-day moving averages. 

This bullish consolidation could continue for longer than most think. 

The short-term aside, let's look at history and assess where Gold could be in the next 18 to 24 months.

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1) Gold Post-Breakout Corrections

First, let's understand where Gold is right now. 

It broke-out from its cup and handle pattern, exploding through $2100/oz in March 2024. 

It peaked in April 2025 and has consolidated very bullishly for 4 months. This is the post-breakout correction.

2) Post-Breakout Corrections Test 200-DMA

Gold has enjoyed 6 other significant breakouts. 

In each case, the post-breakout correction tested the 200-day moving average or came within 2-3% of it (1972, 2010). In a few cases the market went below the moving average before bottoming. 

The weekly chart below includes the equivalent to the 200-day moving average. 

The vertical lines show the post-breakout correction low and test or sniff of the 200-day moving average.

3) Which of the 6 Breakouts are Best Fit for Today?

Gold broke-out from a 13-year-long base to new all-time highs. 

Considering various other data, its at the start of a new secular bull market. It's not at the end like in 1979 or 2010. 

1972-1973 is clearly the best fit to today. 

The 2005 breakout did not occur around an all-time high. However, Gold in 2006 was extremely overbought and was somewhat early in a new secular bull. 

These two are the best fits with 1972 clearly the best. The current correction in time and price is very similar to 1972.

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4) Gold Performance After Correction to 200-DMA

If the current correction continues to follow 1972 then it will get very close to its 200-day moving average before it ends. 

We begin this chart from a potential weekly bottom of $3100/oz on October 10. 

We include the corrections AFTER breakouts to new all-time highs and the aforementioned correction in 2006. 

An average excluding the parabolic move in 1978-1980, puts Gold at $5800 in early 2027. 

An average using only 2006 and 2010 puts Gold near $5500 in spring 2027.

5) Gold All-Time High Breakout Analog

The outcomes are similar to the previous chart but this is better as we see how the entire breakout moves evolved on the current scale. 

We excluded 1978-1980 but included 2005-2008. 

An average of 1972, 2005 and 2009 equates to a $5800 target in February 2027. 

(And that includes data from 2012, after the 2011 peak for the red line). 

The other average uses 1972 and 2009 until the 2009 peak, and then replaces 2009 with 2005. That leads to $6700 target in late 2026.

Summary

Gold is correcting in its post-breakout correction. 

Post-breakout corrections lead to a test of the 200-day moving average or a bottom within 3% of it. 

From there, Gold continued much higher. 

The data shows Gold has a chance to hit $5000 by the end of 2026 and approach $6000 in 2027. 

Note, the best comps 1972-1973 and 2005-2006 corrected 28% and 23% respectively before those targets were hit. 

Therefore, there is risk of a 20% correction along the way.

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Thank you for reading.

I wish you all the best in 2025 and beyond.