Why 79 is the Key Number for Gold

When it comes to gold, there are two numbers every investor is watching: 1,800 and 1,500.

Gold has been fluctuating between those two prices for more than a year. Once the price breaks out of that range, we’re likely so see a lot of momentum in the direction of the breakout.

In other words, if gold breaks above $1,800, it could move much higher very quickly. And if it breaks below $1,500, it could move much lower in a matter of days.

That’s why most gold analysts consider $1,500 and $1,800 key numbers to watch.
But there’s one number that may be even more important: 79!

You can see that number in the chart of the dollar index below. It shows a head and shoulders pattern, just like I predicted back in November.

As I mentioned in that article, this is a bearish pattern for the dollar. If the index closes below $79, we’ll be able to confirm the pattern. This will increase the chances the dollar will move much lower.

Potential Head and Shoulders in Dollar Index is Good News for Gold

See larger image

This is good news for gold, which you can see at the top of the chart. Gold and the dollar tend to move in opposite directions. As you can see, when the dollar index dropped from 88 to 74 in 2010-2011, gold rallied from $1,200 to $1,800.
So if the dollar completes this head and shoulders pattern, it will increase the chances gold will break to the upside of its trading range.
That’s why 79 is the key number to watch for gold. If the dollar index breaks below that level, it’s very likely gold will rally.

Please bookmark us