Here's how gold price could reach $2,000 in 2020

Gold price has been on a tear in April, trading 9% higher in the first two weeks of the month. A respected market analyst now believes that the yellow metal can go as high as $2,000 this year on a specific bullish chart pattern that it had developed over the past few weeks. 

Fundamental analysis: Buy gold for your portfolio, suggest Baruch

Bill Baruch, president of the U.S.-based Blue Line Capital, believes that gold can continue to gain for the rest of the year, as the yellow metal is on the way to record the best month since 2011.

The inverse head and shoulders pattern that Baruch is talking about (chart below) is a bullish reversal pattern that occurs at the end of a downtrend. It signals that the price action has finished moving lower and it is likely to move higher going forward. 

In case you are interested in investing in gold, Baruch’s advice is to wait for a potential pullback to $1,700, which is around $16 lower than the current gold price. 

Technical analysis: Gold price aims higher

Looking at the chart, the inverse head and shoulders pattern looks quite asymmetrical as the two shoulders are nowhere near the same level. Still, the pattern was activated when the gold price broke above the $1,620 - the neckline - last week. 

The upper vertical red line shows that the chart pattern should be completed when gold price reaches $1,840. 

Gold printed the highest levels yesterday since 2012 when it hit the 78.6% Fibonacci retracement, a key short-term target for the bulls. We may now expect a minor pullback as buyers regroup before attempting to complete the inverse head and shoulders pattern in the next leg higher.

Summary

Gold price is trading 9% higher this month on the worsened risk sentiment. Bill Baruch believes that gold can reach $2,000 this year as the bullish chart pattern signals a move to at least $1.840.