The History of Gold Charts

Gold The Ultimate Charting Market

Revised November 2016

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Background
I have traded commodity futures for a living since 1980 when I founded
Factor Trading Co., Inc. at the Chicago Board of Trade. Some people
are dentists, others drive trucks, some teach high school, others are
housewives, some work for government I trade commodity futures
and forex markets. A person needs to make a living somehow!
I entered the commodity business with an international commodity
exporter in 1976, the same year that witnessed the end of a correction
in the price of Gold from $191 to $100 per ounce. Of course, at the time
I did not know that Gold would not again trade at $100.
Little did I also know the degree to which I would fall in love with trading this majestic and magical metal.
In 1977 I bought my first Krugerand for about $160 it remains in my bank safe deposit box to this day.
During the first few years in the business I tried just about every approach to analyze and understand
price fluctuations. Since 1979 my approach to trading has been based almost exclusively on classical
charting principles (Schabacker, 1932; Edwards and Magee, 1948).
Over the years I have traded markets as far ranging as tapioca, rubber, eggs, zinc, T-Bonds, bacon,
Rapeseed, S&Ps, Corn and, of course, Gold. Of all the markets I have traded, none compare to Gold.
After charting and trading Gold for more than 30 years, I have come to three major conclusions.
1. Gold is the purest of all markets to trade. This is probably because there are no real
fundamentals in Gold like in other markets. Nearly every ounce of Gold ever mined still exists.
Gold is worth what the composite of all market participants think it is worth at any given time.
2. Gold is the truest charting market that exists. When the Gold chart speaks, a trader needs to
listen and listen carefully. Chart patterns are extremely reliable in Gold. Of course Gold provides
its fair share of false chart signals. But, when a chart fails in Gold there is usually a lesson to be
learned. The lesson most often deals with patience, or lack of the same. Failed chart patterns in
Gold combine into much longer-duration chart patterns that will eventually work.
3. Gold does not make large moves without first ringing a bell. Big moves in Gold are announced in
advance if only a trader is alert to the signs.
With these lessons in mind, I present from a classical charting point of view the history of the price of
Comex Gold dating back to the mid-1970s.
The charts are arranged in sections, each containing the following:

An insert on a monthly chart

The weekly chart corresponding to the insert on the monthly graph
The daily charts corresponding to the weekly chart

On the weekly and daily charts, major patterns are signified with black boundary lines, minor patterns with
red boundaries.
The historical charts of Gold are a thing a precious beauty!

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Weekly chart 1975 through 1979

Major chart construction

A. Rounding bottom from 1975 through Jul 1978 (labeled A). This rare chart pattern predicted a
grand bull market cycle ahead.
B. Expanding volume throughout 1978 (labeled B) confirmed that the bull market ahead would
be one for the ages
C. A running wedge (labeled C) will often sling-shot a bull trend into a period of price
acceleration
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Daily chart April 1975 through August 1976

Key features
All the below took place in the final declining phase of the rounding bottom during the
correction in Gold from $194 to $100
o Rectangle completed in early Sep 1975
o Symmetrical triangle completed in early Jan 1976
o Symmetrical triangle completed in mid Jul 1976

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Daily chart July 1976 through May 1978

Key features
Head and shoulders bottom completed in late Oct 1976. This was the orthodox low of the
rounding bottom on the weekly graph.
Symmetrical triangle completed in late Feb 1977
H&S top completed in May 1977. Once the target was met the major bull trend continued.
This pattern needed to be understood within the context of the major rounding bottom.
Symmetrical triangle completed in late Dec 1977

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Daily chart September 1977 through August 1979

Key features
Continuation H&S completed in mid-Jul 1978. This pattern propelled Gold prices into new alltime record highs.
Symmetrical triangle completed in mid-Sep 1978
Island exhaustion top in late Oct 1978 indicated the market needed a pause
Wedge completed in late Apr 1979
Major running wedge (labeled C) completed in late May 1979

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Daily chart May 1979 through December 1979

Key features
Pennant completed in mid Aug 1979. Pennants and flags often mark the mid point of a price
thrust.
Major flag completed in late Nov 1979 (labeled D)

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Weekly chart Late 1979 through early 1984

Major chart construction

D. Flag (see previous section)
E. Blow-off top
F. Symmetrical triangle bottom
G. H&S top
H. H&S bottom
I. H&S top
J. Descending triangle (as right shoulder of H&S top)
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Daily chart September 1979 through June 1980

Key features
Flag (labeled D) completed in Nov 1979 see previous section
Half-mast flat completed in Jan 1980 (labeled E). This flag launched the final phase
of the 1970s bull market.
Island top in mid Jan 1980
Descending triangle completed in early Mar 1980
Symmetrical triangle bottom (labeled F)
Pennant completed in late Jun 1980

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Daily chart June 1980 through August 1981

Key features
H&S top (labeled G) completed in Dec 1980. This was the cap to the first big rally during the
1980 to 1999 bear market
Symmetrical triangle completed Jun 25, 1981

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Daily chart May 1981 through July 1982

Key features
Continuation H&S top completed early Nov 1981
Major H&S bottom completed in mid Aug 1982 (labeled H)

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Daily chart July 1982 through August 1983

Major features
Completion of major H&S bottom in Aug 1982
Symmetrical triangle completed in late Nov 1982
Major 13- month H&S top (labeled I)
Descending triangle (labeled J)

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Daily chart July 1983 through March 1985

Key features
Completion of 13-month H&S top and descending triangle in Oct 1983 (labeled I and J)
Completion of a H&S bottom failure (labeled K) in early July 1984. (Note: the H&S failure
pattern is considered to be a singular chart configuration in classical charting theory.)

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Weekly chart September 1983 through January 1988

Major chart construction

K. H&S failure completed in July 1984
L. Symmetrical triangle completed in early August 1986
M. Symmetrical triangle completed in early April 1987

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Daily chart December 1985 through February 1986

Key features
Area island bottom completed in Mar 1985
Sidways price action from Mar 1985 through late Dec 1985 was an indication that the market
was in the process of making a much longer chart congestion prior to the next trend. There
are times when Gold will frustrate chart traders. But eventually the Gold market will
announce its next big move. When the Gold market puts chartists through prolonged agony it
is important to remember that the market is just marking time.

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Daily chart January 1986 through December 1986

Key features
Major symmetrical triangle (labeled L) completed in late Jul 1986. Led to a 47% increase in
price within 8 weeks.

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Daily chart September 1986 through November 1987

Key features
Major symmetrical triangle (labeled M) completed in late Mar 1987 led to a quick 15% price
advance

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Weekly chart - July 1987 through September 1993

Major chart construction

N. Major wedge completed in November 1989
O. Major wedge completed in April 1993

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Daily chart December 1987 through September 1989

Key features
Major wedge (labeled N) developed through this period. The appearance of wedges should
always put chartists on guard for a big price thrust.

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Daily chart August 1989 through October 1990

Key features
Completion of major wedge (previously labeled N) in Nov 1989
Double top completed on Mar 20, 1990
Beginning stages of another major wedge beginning in Aug 1990

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Daily chart July 1990 through May 1992

Key features
Formation of a massive falling wedge pattern (labeled O)

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Weekly chart 1992 through May 1998

Major chart construction

P. Descending triangle in 1997
Q. Flag in 1997
Note also the end-around symmetrical triangle completed in September/October 1996
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Daily chart December 1992 October 1994

Key features
Completion of major wedge in Apr 1993 (labeled O)
Beginning stages of an end-around symmetrical triangle failure sell signal

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Daily chart October 1994 August 1996

Key features
Symmetrical triangle was completed in Jan 1996, but quicky ran out of gas. This set the
stage for an end-around sell signal. This was a confusing chart development for traders.
But in Gold, the failure of a pattern to produce an expected outcome almost always leads to
the opposite outcome. See the opposite outcome on the next chart.

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Daily chart June 1996 through August/September 1997

Key features
Outcome of end-around from Jun 1996 through Feb 1997
Major descending triangle completed in late Jun 1997 (labeled P)
Major flag (labeled Q)

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Weekly chart 1998 through February 2004

Major chart construction

R. Descending triangle completed in May 1999
S. H&S bottom completed in Sep 1999
T. Falling wedge completed in May 2001
U. Symmetrical triangle completed in Dec 2002
V. Symmetrical triangle completed in Aug 2003
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Daily chart July 1997 through October 1998

Key features
Completion of major flag (labeled earlier as Q)
Formation of major descending triangle (labeled R)

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Daily chart September 1998 through November 1999

Key features
Completion of descending triangle (labeled R) in May 1999. This was the final chart
formation of the 20-year bear market that began at the Jan 1980 high.
A major H&S bottom (labeled S). This pattern began the bull market that continues to this
day. Notice the price gaps in late Sep 1999. Such violent price thursts should always be
considered as a sign of things to come.

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Daily chart April 1999 through March 2001

Key features
The H&S bottom (labeled S)
A prolonged falling wedge (labeled T). As mentioned earlier in this document, prolonged
falling wedges almost always produce a price thrust once they are completed.

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Daily chart January 2001 through November 2002

Key features
The major falling wedge (earlier labeled T) was completed in May 2001, but prices almost
immediately retested the apex. According to Edwards and Magee, a test of the retest of a
falling wedge is quite normal and does not negate the bullish implications of the wedge.
From May 2001 through May 2002 the market stair-stepped higher. While overlapping
waves (not to be confused with the Elliott Wave Theory) are difficult for a chartist to trade,
their implications are quite clear the market is building a base for sharply higher prices.
A major symmetrical triangle (labeled U) was completed in Dec 2002

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Daily chart May 2001 through Mar 2004

Key features
Major symmetrical triangle completed in Dec 2002 (labeled U)
Major symmetrical triangle completed in Aug 2003 (labeled V)
Note: The correction from Feb through Apr 2003 was severe and could have easily tested the
resolve of a bull. However, profits from the pattern (labeled U )would have been taken in Jan and a
chart trader could have remained on the sidelines until the Aug completion of the pattern (labeled V).

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Weekly chart 2003 through May 2009

Major chart construction

W. Symmetrical triangle completed in Aug 2005
X. Flag completed in Mar 2006
Y. Symmetrical triangle completed in Feb 2007
Z. Rectangle completed in Sep2007
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Daily chart September 2004 through December 2005

Key features
8-month symmetrical triangle completed in Aug 2008. This pattern had a tricky retest, but
serious damage did not occur to the pattern and the sharp rally the first day of Sep resolved
any questions.

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Daily chart September 2006 through December 2006

Key features
Major flag (labeled X) completed in late Mar 2006. These flags are often half-mast in
nature, indicating that the distance traveled into the flag will be repeated out of the flag to the
upside. This is an easy target measurement for knowledgeable chartists to calcuate.
The formation of a major symmetrical triangle (labeled Y)

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Daily chart Decenber 2007 through February 2008

Key features
Completion of the major symmetrical triangle in Feb 2007 (labeled Y)
Major rectangle completed in Sep 2007 (labeled Z)

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Daily chart July 2007 through August 2008

Key features
Half mast symmetrical triangle or pennant completed in late Dec 2007
Beginning of an extended period of uncertainty in Mar 2008. At this point a pure chartist
would have been bewildered by Gold, not knowing whether the bull market was dead or just
in for a major pause. One thing would be sure for a skilled chartist the Gold market would
declare its next major price trend. But, patience would be needed!

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Weekly chart October 2006 through October 2012

Major chart construction

AA
AB

AC
AD
AE
AF
AG

Continuation H&S pattern completed in Sep 2009

Symmetrical triangle completed in Sep 2009 serving as the right shoulder of the H&S
pattern labeled AA. Often an extended pattern, such as the H&S, will be launched by a
smaller pattern.
Continuation H&S pattern completed in Apr 2009
Rectangle completed in Apr 2011
Symmetrical triangle completed in Jul 2011
Symmetrical triangle completed in Aug 2012
Rectangle pattern begins to take shape could be a continuation or reverrsal pattern

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Daily chart -- January 2008 through November 2010

Key features
Beginning in Mar 2008 the Gold market began to chop up and chop down without any clear
and precise chart patterns. This was a sign that Gold was marking time, and that an
enourmous pattern would be formed, leading to a massive move.
This sideways choppy trading range began to resemble a continuation H&S pattern
sometime in Apr (labeled AA). At this time a chartist would have been put on high alert.
Continuation H&S completed in Oct 2009 established a target of 1350 (labeled AA)
Note that the completion of a 7-week symmetrical triangle (AB) launched the continuation
H&S pattern

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Daily chart August 2009 through October 2010

Key features
Continuation H&S pattern (AC) completed in Apr 2010

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Daily chart October 2010 through October 2012

Key features
Advance in Apr 2011 completed a rectangle (AD)
Symmetrical triangle (AE) launched the final blow off of the Gold market. Sharp accelerations
normally lead to the end of a trend.
Following the double top in Aug Sep 2011 the market went into a broad trading range
A symmterical triangle was completed in Aug 2012 (AF)
By early 2012 it was clear that the market was forming a massive rectangle pattern

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Weekly chart October 2012 through December 2015

Major chart construction

Decline in Apr 2013 completed a major rectangle (AG). The target of 1230 was quickly met.
A half-mast symmetrical triangle was completed in Jun 2013
The mid 2013 low led to a rally into the Aug 2013 high. This rally did not constitute a chart
bottom.
The decline from Aug 2013 through the Dec 2013 was a possible retest of the mid 2013 low
but this still did not constitute a bottom.
The rally to the March 2014 high turned many traders into born-again bulls. But, nothing on
the charts has constituted a bottom.

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The rally from the May 2014 into the early July high constituted what might have become a
H&S bottom, and represented the first time since the Oct 2012 high that the bulls had any
hope
The decline below the May 2014 low in Sep 2014 represented the completion of a bearish
H&S failure with a target of 1067. While the rally in early 2015 challenged this interpretation,
the 1067 target was eventually met in Nov 2015.

Daily chart June 2012 through July 2013

Key features
The massive rectangle was completed in Apr 2013.
A half-mast triangle formed in Apr through Jun, leading to the decline to the 1230 target from
the rectangle

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Daily chart May 2013 through December 2014

Key features
The Gold market traced out a possible H&S bottom from Jun 2013 through the rally into Jul
2014 high
The market rolled over in Jul 2014. The decline below the May 2014 low at 1242 completed
a H&S failure pattern with a target of 1067.

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Daily chart December 2014 through January 2015

Key features

The rally in Jan 2015 serious challenged the H&S failure interpretation but the deep retest
quickly sputtered out and the down trend continued
The decline since Jan 2015 has taken a stair-step profile, but several chart formations did
develop during the period
The decline in Jul 2015 completed a 7-month symmetrical triangle and a 3+ month H&S top
pattern. The target of the H&S was met at 1086, but the implication of the symmetrical
triangle was not fulfilled.
The advance in early Oct completed a 10-week symmetrical triangle bottom. This was the
first serious daily chart bottom in the bear market from the Oct 2012 high. This bottom failed.
Following a few days of advance the market rolled over into an end-run, a bearish
development.
In Nov 2015 the 1067 target from the early H&S failure was finally met

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Weekly chart January 2015 through February 2016

Major chart construction

The entire period from May 2013 through the present has represented a stair-step decline
The period since January 2014 has taken the form of a falling wedge. A falling wedge pattern
generally but not always -- will not represent a major bottom. A decisive close above the
May 2015 high at 1232 would place the odds on this wedge as a chart bottom.
The daily chart below formed and a 12-week cup and handle pattern. The target at 1172
was met on February 5. This is the first daily chart bottom to met its target since September
2012.
Meeting the target at 1172 if a MAJOR change in the behavior fo Gold prices.
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Weekly chart January 2016 through present (Nov 2016)

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Major chart construction

The advance in Feb 2016 completed a 25-month falling wedge. This was the first significant
weekly chart buy indication in Gold since Aug 2012 a signal that produced a $140 rally.
The targets produced by the falling wedge were 1309, 1347 and 1392.
The advance in Jun 2016 met the target of 1347.
The decline in Oct 2016 completed a 14-week descending triangle top pattern. The target of
this pattern was met at 1250. This descending triangle top was retested in early Nov 2016.
There are no bullish weekly or daily chart patterns developing in Gold that would indicate
higher prices.
The last chart pattern of any significance in Gold was the descending triangle top a sell
signal.

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Summary
As a chartist, here is what I know.

Gold always rings a bell before making a major move.

Absent a clearly defined chart pattern it is doubtful that Gold will develop a sustained trend.
The longest-term charts (such as the one on the front cover) remains up.
The completion of the Cup and Handle on the daily graph and the meeting of its target was
the first significant constructive price action in Gold since August 2012 and the first indication
that Gold has rung a bell.
The completion of the falling wedge on the weekly
graph was yet another sign that Gold has
bottomed.
The falling wedge has met its indicated target.
Thus, I believe another bullish chart pattern must
form to lead Gold higher.
The most recent completed chart pattern was the
descending triangle on the daily graph completed in
Oct 2016.
Remember, though, falling wedge patterns (such
as shown on the weekly Gold chart) have the tendency to back and fill, even moving well
back into the wedge itself. Thus, a decline back to 1100 to 1125 is possible.
We are at an important junction in Gold as shown by the two boxes on the longer term graph.
Was the correction from Aug 2011 through Nov 2015 (red box) a correction in the dominant
bull trend that began in the 1970s, or is the rally from the Nov 2015 low to present (blue box)
a correction in the bear trend that began at the Aug 2011 high. Time will tell and Gold
should ring another bell.

Peter L. Brandt
11 Nov 2016

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