What happened in gold prices over the least week is going to become more commonplace.
Early Tuesday morning (Oct. 23), as I began my daily routine, I checked in on gold prices just before 8 a.m.
What I saw shocked me: $1,237.
That was the price for an ounce of gold; $15 higher after the metal had ended the previous day at $1,222.
The price of gold hit a three-month peak as stocks slid globally and geopolitics remained high on the list of investors' concerns. The 10-year treasury yield dropped to 3.13%, and the U.S. dollar remained near a two-month high as safety became the order of the day.
Just last week, I said to watch for a break above $1,235 for a possible confirmation that a new gold rally was at hand.
We're almost there now, and I'll show you the latest gold chart pattern to show you exactly why…
Why Last Week Kicked Off a Gold Price Rally
Monday (Oct. 22) was lackluster for gold as equities bounced back strongly and the dollar saw gains.
But Tuesday brought the big move.
After climbing strongly in the early morning hours, gold reached near $1,239 momentarily, just after 8 a.m. Stocks sold off hard, with the Dow dropping almost 500 points, or 2%, as weak earnings and geopolitical tensions weighed on investors' spirits. The EU rejected Italy's proposed budget and asked for a revised draft within three weeks, and Brexit negotiations continued to cause concern.
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On Wednesday (Oct. 24), there was more obvious safe-haven buying as the U.S. dollar jumped again. The U.S. Dollar Index (DXY) made a morning run to test 96.5 before turning back to 96.35.
But equities continued their free fall, with the S&P 500 off 3%, the Dow down 600 points or 2.4%, and the Nasdaq down a whopping 329 points or 4.4%. That market sell-off pushed the S&P 500 into the red for 2018. Once again, gold prices held steady as safe-haven buying dominated, pushing the metal up $3 on the day.
You can see how the DXY slowly grew over the week as stocks slumped…
By Thursday, U.S. equities bounced back, and the dollar jumped on news the European Central Bank left rates unchanged while its president Mario Draghi promised monetary policy would remain "very accommodative." That kept gold prices flat.
To end the week, equities sold off again as the stock rout extended. But the price of gold jumped to $1,240 by late Friday morning (Oct. 26) even as the DXY retreated from an 8 a.m. peak at 96.85 to 96.5, and the 10-year yield dropped to 3.08%.
That jump to $1,240 was short lived as gold retreated, but still managed to close at $1,233.
But I believe last week's gold price performance was great news – and a sign a gold rally is in the works.
Here's my gold price target thanks to the coming rally…
Where Gold Prices Will Rise to as the Rally Gains Steam
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.