Precious metals have remained firm in recent trading, with Gold futures setting the tone for the rest of the complex by regaining a key trading threshold above $1,350 per ounce. Volatile and largely sideways price action above this level as consolidated into a familiar Ascending Triangle chart pattern, seen here on the 240-minute time frame in the nearby Gold futures contract.

With across the board strength seen in the precious metals combining with tepid performance of the US Dollar on the foreign exchange market, the prospects for renewed strength in Gold remains high. The technical support established by the lower end of the Ascending Triangle may well become a pivot zone for buyers to enter the market and re-establish long positions that were liquidated during the weakness in the complex seen at the beginning of the year.

The formation of this triangle provides guidance for next week's anticipated trading range, with the bottom end expected to hold near $1,355 per ounce if the pattern holds stable at these levels. The upper band of resistance is presently near $1,370 per ounce, creating a $20 per ounce swing range for the price of gold this week, which is in line with the recent volatility.

This Ascending Triangle may still be fairly early in its overall development, as the pattern can see a substantial narrowing of the support and resistance levels while the market remains range-bound inside of the triangle, allowing traders to establish a longer term directional bias and position for an anticipated breakout.

This formation represents what is commonly a continuation pattern, suggesting this consolidation may be a temporary pause before a thrust higher into the previous highs above $1,400 per ounce. An early breakout to the upside of the triangle would increase the momentum implied by a rally, encouraging the idea that the previous corrective move to below the $1,350 support level was indeed a short term correction, and that the bull market for Gold futures will resume after this congestion phase comes to a close.

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