24K99 News Independent Precious MetalsTechnical analysisAnalyst Mike Roy stated that, upon reviewing long-term charts of gold against the Consumer Price Index (CPI) and the Producer Price Index (PPI), he found that the gold price is in a significant cup-and-handle formation. He pointed out that the trend of gold against CPI and PPI indicates an expanding bid for gold.

Mike mentioned that both CPI and PPI are indicators of continuously rising prices (inflation), and when gold outperforms these indices, it can be said that the gold price is rising 'in real terms,' which means that the purchasing power of gold is expanding.

Although CPI measures the final prices of goods/services paid by consumers, PPI measures the wholesale prices paid to producers.

Each chart convincingly indicates that gold is about to achieve this.

He said, 'The first chart we want to look at is gold/CPI.'

(Source: GoldBroker)

"Last time we looked at the annual chart for May and noticed a turning point. We found ourselves in a huge cup and handle pattern. This week, we will delve into the quarterly chart and observe that the long-term downtrend resistance line indeed seems to be experiencing a significant breakthrough."

He continued, "Such charts should help gold holders rest easy because they know that due to future inflation leading to inevitable consumer price increases, gold is likely to rise faster."

He explained that this is because the market can anticipate this chart impulsively moving higher from this very large, elegant technical formation.

Mike further pointed out that the second chart of gold/PPI should be very similar to gold/CPI, as these two indices display similar inflation trends.

(Source: GoldBroker)

"I could draw a cup and handle chart similar to this one here, but I'd like to draw your attention to a few other points. Firstly, we can see that gold/PPI has just surpassed its 1980 historical high in the past few months, and now appears to be backtesting this high - a very bullish sign."

"Next, we can see that this chart is defined as three very large expanding wedges, dating back to 50 years ago."

"The breakouts of the first two wedges led to impulsive rallies of about 150-200%."

"If the third wedge also breaks out to the upside, we can expect a similar impulsive trend."