Goldtent TA Paradise

During the early years of golds last big bull run in the early 2000’s, there were many multi-month pullbacks and consolidations…

The charts say it’s possible. It would make me feel a lot better if we pull back much further from here. A healthy bull market in PM’s needs to shake out excessive optimism if it’s going to be sustained over a long period of time.

The US Dollar is on the verge of a very important breakout here. Gold is on the verge of a more protracted, deeper correction, and the Gold/Silver ratio has failed to confirm the next up-leg is about to start. Everything is on pause. The cycle guys saw this one coming of course, but the bull is well and truly alive, with much higher prices ahead.

Until gold drops out of this channel $1600/$1700/$1800 is still in our sights

I still like the comparison with the ‘bowl’ base and breakout in the early 2000’s. There are many similarities. My suggestion would be (based on past behaviour), gold needs to retest $1400.

Edit: One notable difference is the way we descended into the base in the late 1990’s (i.e. gradually). That contrasts sharply with the waterfall decline in 2012/13. That may open up the ‘reverse symmetry’ scenario, as I’ve mentioned before. In other words, we could go back up in just the same way we came down (i.e. fast, with no back-testing of the breakout or edge of the bowl).

…gold appears to be resuming its logarithmic advance.

Gold is balanced and perfectly poised on channel support. Gold/Silver ratio is at critical support and the Dollar is waiting to prove itself. Something is about to happen, which will resolve these chart patterns this week. Waiting on the Fed announcement…

A couple of gold possibilities, depending on reaction to the FED meeting next week, along with updates of my Dollar and GSR charts…

If (unlikely), but if, we were to see the much feared ‘big drop’, this is where I would expect to see ultimate support…

Here’s my chart from a couple of days ago, extended out to the end of the year…

They’re all displaying the same type of basing/breakout patterns. Bullish wedges within long term ‘bowl’ shaped bases. If Energy fuels follows the same playbook, the percentage gain are likely to dwarf gold/silver and the PM miners…

Last chance…

I find it interesting that the support line for this move is at the same angle as the support line on the 2012/13 price collapse. It will vary from platform to platform and depends on how zoomed in you are, but on my chart it’s 77 degrees. However you choose to view it, the angles are the same. The MACD might be setting alarm bells ringing, because it looks like it might be heading for a bearish cross. However if you look at what happened on the way down, there was a mirror image – it looked like we might get a bullish cross. It never happened. The trap door opened and the MACD continued it’s plunge to somewhere around -98. There is no reason why the same can’t happen on the way back up. That would give us an extreme MACD reading close to +100 at the precise time that gold price (given the 77 degree angle of ascent) approaches $1800 – early 2020. I think this is now my ‘base case’ (most likely). Should this happen, that would be the time to take profits off the table. I would expect a ‘sideways chop’ for many months, with some good entry points at lower levels, allowing for some better gains in the years ahead.

I think I might know what would cause this to happen. I think we’re going to see a number of interest rate cuts in the Sept/Oct/Dec FOMC meetings. You might view these as ‘insurance cuts’, trying to hold back a recession. That would fuel the move to $1800. We may get a pause of some kind, to evaluate the effect, hence gold pullback/sideways price action. In my view it won’t be enough. At that point, we’re going to be up to our necks in a foul smelling pile of self-inflicted dung. With nowhere left to go, I think the Fed will dive into negative rates and all out quantitative easing, or some disastrous equivalent. That’s when we will have $2000 gold in the rear view mirror. There are other possible ‘black swans’ that could cause gold to hit the launch button before then (China for example). However it unfolds, I think it is very likely to take place in late 2020 or 2021. After a rapid ascent towards, maybe $3000, we have the mid-cycle pullback at the half-way point in the 16 year gold cycle. It’s likely that sometime in 2022 or 2023, we fall rapidly into a 2024 low. From that point onwards, through the mid/late 2020’s gold should continue to appreciate rapidly versus the US Dollar. All my own personal views, so no guarantees (a bit like forecasting the path of a hurricane – perhaps we should get the Donald to help us with his marker pens…).

I just had another look at the gold ‘ladder’ and drew a black support line for the current consolidation to the point where it meets the up-trending support since all of this began. Guess what date they come together at ? Exactly, precisely FOMC day. Check out all the other dates as well.

I don’t know about you, but I like to hold a handful of ‘weird’ shares. Companies that I think have at least a feasible prospect of returning tens of thousands of pounds for an investment of £100 or so (in this case, I have £300 invested). Alien metals rose 80% or so today on this news  https://ukinvestormagazine.co.uk/alien-metals-shares-surge-on-further-precious-metal-mineralisation/

It prompted me to look at the chart. I’d forgotten just how crazy it is. I can dream can’t I ?

All that hard work, and the GSR apex breakdown has just been invalidated. Unless we see a sharp reversal today, this could suggest a much larger PM pullback is upon us. Watching closely.

Edit: Crisis averted 😉

If this is just another ‘standard’ bullish consolidation, these charts show where we might expect the ‘pullback’ to end. If we pass these zones, we’ll need to look down for further support areas of course.

I’m holding for the time being…

One possible target before we see a meaningful pullback.

With the GSR dropping like a rock, silver is doing what you would expect…

…with this chart, but only just.

Well, gold is going up reverse symmetry style, so why not the miners ?

The first chart is the one I posted about 6 weeks ago. The second one is todays update. Expect Silver and the miners to react accordingly.