Gold hit $1217 yesterday and all the buzz is about the price jumping higher. We can talk about the reasons why gold will break higher from different perspectives. Choosing from two of the most common, first, the fear factor of the global markets relative to the global economy and second, too much money supply and inflation. Supply and demand could be thrown in the mix as well, but the technically speaking the chart below shows some hurdles in front of gold if it is to move higher near term. 

Using GLD as a proxy for gold the $119 level is the next hurdle of resistance. This would equate to the $1225 level for gold. If it can break through this level with confidence (volume) the upside target would be the June high ($123.50).

Some technicians are talking about the reverse head-and-shoulder pattern. The neckline is at the $119 level on GLD and corresponds to the resistance line drawn on the chart above. If you you measure the head to the neckline is almost correlates to the June high, interesting. The $1225 resistance on gold has been strong and I would look for confirmation on the break above this level.

Fundamentally I find no reason for gold to move higher. But, if enough investors see the pattern and believe in the outlook for gold, it could be a self-fulfilling prophecy. It worth watching for a trade opportunity based on this strategy, but you need to define your entry, target and stop prior to putting your money at risk.