By "this," I mean the price of gold, and by "ridiculous," I mean repetitive to the point of absurdity. That's OK. The prospects for gold from here are highly positive.

By now, readers are tired of my description of gold trading as range-bound between $1,700 per ounce on the low side and $1,900 per ounce on the high side, with $1,800 per ounce as the central tendency. That's completely accurate but also highly repetitive, since it has held true with only brief and minor exceptions for the past year.

This pattern emerged in November 2020 after gold fell from its all-time high of $2,069 per ounce on Aug. 6, 2020. The predictable question from investors is: "Fine, we get it. But, when does the pattern break either to the upside or downside? What's next for gold?"

That's where the good news begins. Yes, gold has been range-bound, but the range is getting smaller. While swings of 5% in a matter of days were common as recently as last summer, that volatility has cooled off. Gold still moves up and down in price, but the swings are much more compact.

The central tendency is still $1,800 per ounce, but the swings are more tightly bunched between $1,750 and $1,850 (again, with a few exceptions). That's a 5.5% band to replace the prior 11.0% band.

We're also seeing a pattern of lower highs and higher lows as compression continues. That's a technical pattern called a pennant because it looks like a sports pennant if you draw converging lines through the highs and lows.

A pennant is a setup for a breakout. The breakout can occur in either direction, but it's more common for the breakout to continue the trend that existed before the consolidation.

Whether we take the $1,685 price on March 30, 2021, the $1,725 price on Aug. 9, 2021, or the $1,722 price on Sept. 29, 2021, it's clear that this pennant formed in the wake of an uptrend. This suggests that the breakout will be to the upside and it will occur soon.