Charts: Gold Rally Could Collapse; Test $1,000
The recent surge in the price of gold could "collapse" and quickly move back toward the $1,000 mark as the precious metal has not confirmed its upward trend yet, Daryl Guppy, CEO of Guppytraders.com, told CNBC.
"There's a possibility that this rally is going to collapse relatively quickly and take us back and retest the $1,000-1,020 (per Troy ounce) level," Guppy said.
"What we need is the creation of this trend before we can look at these 1,500 targets as being reasonably achievable," he said.
The price of gold has soared to fresh highs around $1,065 due to the recent slump in the value of the dollar and underlying inflation concerns. But the rise is still only a rally and has not been established as an upward trend, according to Guppy.
"What we're looking for is a retracement and confirmation of the trend before we can have confidence that this is likely to continue," he said.
A break above $1,080 per Troy ounce would signal a further rise toward $1,150, Guppy added.
- Watch the video above to hear Guppy's technical analysis of the Shanghai Composite Index, the Kospi Index and oil.
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