The price of gold reversed from a double bottom formation and now looks poised to make a move above $1,820. The measured move of the double bottom pattern suggests more strength ahead for the yellow metal, as investors turned their attention to gold in search of safe-haven assets.
After a new all-time high in 2020, the price of gold reversed sharply, losing several hundreds of dollars in the course of a few months. The dollar did not appreciate against rival fiat currencies, so the move lower was mostly attributed to institutional investors allocating a bigger part of their portfolios to digital assets.
That move came under pressure in the last few days as Bitcoin and other cryptocurrencies collapsed by more than 15% last weekend. As such, at the opening today, investors looked for safe-haven assets, one of them being gold. Therefore, the bias is that the price of gold will continue its march higher, as suggested by the double bottom’s measured move as well.
Gold Price Technical Analysis
A double bottom has the shape of the letter W, and traders focus on the price action surrounding the neckline’s level. A break higher is bullish, as it opens the gates to the measured move. As such, bulls may want to stay on the long side, with a stop below the neckline and a take profit level above $1,820.