Gold continues to steal the spotlight in the commodities markets this week as economic jitters across the US and Europe, driving buyers to the safe haven of this alternative investment. Golf futures staged a strong rally throughout the month of June, posting several new highs above $1,600 per ounce for the month. The first trading day of August will begin with gold perched just beneath its all-time record high price of $1,637 per ounce.

The near constant push higher for gold since it broke the $1,550 resistance level has made for a formidable fundamental bull market, with a very solid technical backdrop for a continuation from the current levels. While an eventual correction back to retest the initial major breakout from the $1,550 level would be in line with long term expectations for such a significant move, thus far there are no indications of price weakness on the charts.

The latest bullish formation comes on the 15-minute time interval, with a small Triangle chart pattern having formed after a minor retracement from the $1,637 high. Buying on pullbacks remains firmly entrenched in the current price action, and the shallow sell-off found quick support above the $1,620 level. The ensuing consolidation during Friday's session set up the triangle breakout, which projects a retest of the previous high, which would be in line with the overall trend.

The triangle breakout projects a price target of between $1,634 and $1,641 per ounce from the current level, the higher end of that range representing yet another new high for gold. If achieved, this would also mark a move of over $100 per ounce since this latest rally began. As the market moves further away from the longer term breakout price of $1,550, technical support levels will become incrementally more important to watch for signs of weakness amidst profit taking.

The most likely fundamental driver to trigger a pullback will be a consensus by the US congress to raise the debt ceiling, which may trigger knee-jerk selling and take some steam out of gold's uptrend. Meanwhile, the chart continues pointing towards higher highs in the short term, with small corrections finding buyers, and patterns pointing towards higher forecasts from here.
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