In my last public posting at the end of February, I discussed how gold was setting up for correction in March, with $890 a very important fractal target for such a pull-back.

Gold ended up bouncing off the $890 level three times, with the last one a highly energetic "slingshot" move off the Fed. I call these "slingshot" moves when a market is first attracted down to a specific energy level, and then just as quickly repelled away.

Although few people are aware of it, such "attractor/repeller" energy levels are a defining characteristic of every financial market, and it's possible to know with great precision where these important levels are ahead of time -- as we just saw with $890 on gold, and how before that $990 on the upside.

Even though they are very difficult to survive, such an energetic drop-and-rebound is actually an ideal way to launch a strong new trend. This energy surge off the Fed is precisely the sort of event that can dominate and influence a market fractal pattern over the upcoming 4-month cycle.

So this is a perfect time to examine the big monthly pattern, which has reached a particularly favorable configuration. The monthly fractal dimension is very high after a swift test of the last major breakout level and an equally energetic rebound -- again, a very similar pattern to the slingshot move we just saw on the daily chart off $890, except on the monthly pattern this was a huge move down to $680, and then right back up.

Gold is in a much stronger position now than it was the first time prices hit $1,000, about a year ago. Back then the monthly fractal dimension was stretching down to the low 30s -- indicating imminent trend exhaustion -- as gold was finishing off an epic one-way sprint to the upside.

Here's how that looked at the time:

Gold was crying out for a consolidation right there, with the likeliest path a swift test back down. This is why I was confident in forecasting a big correction which would carry down to $730.

But now it's a very different story, and we need to be aware of the massive bullish potential of this current monthly pattern. It's instructive to look back at previous parabolic growth patterns to see how markets behave in a similar situation, and we can use the late 90's bubble in tech stocks as a template for the current pattern in gold.

Below is a chart of the Nasdaq 100 (NDX) back in 1997 during its epic parabolic run.

We can see how the NDX was continually breaking into the clear and then coming back down to test the last breakout level. I have highlighted this particular breakout as it happened around the same price levels as the current pattern in gold.

The NDX came down to test the breakout around 950 -- testing it 3 times over a 4-month period -- while the fractal dimension moved back up to 55. This turned out to be a direct prelude to the breakout that kicked this growth pattern into "hyper-drive."

The first arrow points to the breakout, as the NDX took off and didn't stop until it hit 1,500. After another hard correction -- and a double-test of this breakout at 1130 -- the NDX took off into the stratosphere.

Gold is now in a very similar situation, with the same explosive upside potential.

We even have the investment theme in place to power such a move, with unprecedented stimulus flowing out of Washington. If credit markets can thaw even a little bit -- that is, if new money created by private lenders starts to slosh around with the trillions coming out of Washington -- then gold will launch into just this sort of NDX-style blow-off parabolic run.

It's also interesting to see just how tiny this initial breakout looks on the chart when we move forward and look at the entire upside run, including the incredible blow-off that inevitably finishes this type of pattern.

So if we see a breakout now in gold to new highs above $1,040, then the only mistake we can make will be getting out too soon.

Of course there is still a lot of work to be done to get into this "hyper-drive" pattern, but the necessary groundwork is already in place.

It's important to follow gold closely right now, when there is so much energy in the pattern. In the Fractal Gold Report, I provide daily updates on the short-term and longer-term patterns in gold, with periodic updates also available on the silver market for subscribers on the annual subscription plan.