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Gold is setting up for a breakout years in the making, technical analyst says

Chart points to massive breakout for gold
Chart points to massive breakout for gold

Trade war uncertainties and expectations of a Federal Reserve rate cut has sent gold soaring this month.

The precious metal is up more than 3 percent since the start of June, hitting its highest level in more than a year on Friday.

According to Carter Worth of Cornerstone Macro, the charts are setting up for a breakout years in the making.

"Gold has been toying with the prospects of a breakout repeatedly for the past five years," Worth said Friday on CNBC's "Options Action."

"It keeps approaching this $1,350 plus-minus level, and then backs away. But what's increasingly encouraging about it is the way we've gotten here, which is to say, it's [repeatedly hitting] a higher low, all which would suggest that the tension ultimately is to be resolved."

Gold was down more than 1% on Monday afternoon, trading at $1,331.20.

As for what a resolution could look like for gold, Worth is feeling bullish — really bullish — because of the technical implications of that 1,350 level.

"There's an expression, the more authoritative a level is, the more authoritative the resolution," said Worth, "meaning, this $1,350 level has been in play, now, for half a decade."

All the while, gold's pullbacks have been increasingly shallow during the period of time over which $1,350 has been an authoritative top, suggesting that it's finally ready to spring off the top and into a major breakout.

Additionally, Worth notes that gold has recently conquered the commodity space after a long period of lagging.

"What's important is that we are making new relative highs right now. [Gold] has bounced perfectly off this relative line over, and over, and over, and over, and it did it again.

"We just moved above [the recent relative high], we made new relative all-time highs this week. I think that is a very important development. I like gold, I like gold miners, and I think you have to have some form of it, in some fashion, in your portfolio."