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Gold is rallying regardless of what’s happening in other markets.And while there are signs of a top, gold appears to simply not care about them at the moment. In particular, the gold price keeps on forming daily reversal candlesticks, which “should” be tops, but they likely aren’t. The emotional momentum is so strong that it takes gold even higher despite the overbought status and despite the clear technical top signs.Did the technical analysis stop working? No, it’s simply the case that given the medium-term analogies, short-term indications yield. Let’s take a look at gold’s long-term chart for more details:
There are several techniques that point to gold’s upside potential at about $2,340 – $2,380.The one that I started the above gold’s upside-target analysis with is the analogy to the previous times when the RSI moved above 70, then gold consolidated, and then it moved up once again despite that recent overbought status. After all, this is what we see now, so the question is, what happened in previous analogous cases?I marked the previous cases (based on the RSI readings) with orange rectangles, and I then copied the post-consolidation declines to the current situation – they are all marked with dashed, blue lines.There were two areas that gold is likely to end up in given this kind of analogy. The lower one is more or less at the current price levels, and the higher one is at about $2,340 – $2,380.The upper area is confirmed by several additional techniques:

At the moment of writing these words, gold futures are trading at about $2,270, so we might be looking at an upside potential of another $100.The above is a quote from Monday’s analysis, and today, gold futures are trading at about $2,296.
Gold reversed today, but… It also reversed yesterday and on Monday, and those days were followed by higher prices, so it seems that gold can still rally further despite those reversals.Another $50 – $90 rally seems to be in the cards.I previously wrote that gold might rally as long as there’s no breakout in the USD/YEN currency exchange rate and this remains to be the case. In particular, I wrote that this currency pair can continue to trade sideways for days and that would give room to gold’s rally. And that’s exactly what’s been taking place.
The USD/YEN is on the verge of a breakout, but it hasn’t broken yet, and the gold price is taking advantage of it.It seems that this can persist for several more days, and then gold could top while the dollar soars. This creates a good trading opportunity, and there’s a way to limit the risk, too.More By This Author:Gold Price’s Relentless RallyGold And USD Index Break Higher Together – What Gives?Dollar’s Verified Breakout Could Be The Trigger For Gold Price