Goldtent TA Paradise

Here’s another pattern worthy of consideration

Seems possible to me (assuming we get the all important breakout).

I keep remembering the global gold price breakouts (to new highs in some cases). That just doesn’t feel bearish to me, so I’m going with my thesis unless we start to break some of the support lines in the following charts. I marked a zone on many of my charts that we’re now up against. Nothing will be proven unless we break crucial support or climb clear of $1400. Wall of worry ?

A compression of the Bollinger Band width is strongly suggestive of an approaching ‘decision point’. We know that we’ve hit the ‘turbulence zone’ I’ve been talking about for some time. A pause/consolidation/pullback here is healthy, but we need to watch support lines, so my next post will do that.

Hopefully this chart might explain why I think we are a hugely important point for silver. Declining resistance meets a zone of horizontal support – right here. I’m not sure what’s controversial about that.

The outcome of this bull/bear battle, right here could well define the silver market for a long time to come. Like gold, silver has broken through this resistance in many global currencies, but still has a lot of catching up to do.

So close now. Will the bulls prevail, or has it all been a mirage ? We’re going to find out soon…

This was a big learning point for me. My original investment a few years ago went up from about $3 to $20, then plunged, and I got out at about $10 if memory serves me correctly. Anyway, I got back in again a while back and it’s up 10% today on some pretty important news (in terms of getting a mine actually built) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/987-tsx/ndm/58467-northern-dynasty-us-army-corps-of-engineers-releases-draft-environmental-impact-statement-for-alaska-s-pebble-project.html#.XG20YfovmEg.twitter

We’ll find out soon…

Energy Fuels…

Not a recommendation – just an observation

Not good https://tradingeconomics.com/country-list/government-debt-to-gdp

$22 trillion debt, approximately $20 trillion GDP, so well over 100% now. That’s one very good explanation for de-dollarization and why the Dollar is going down into its cycle low. Way down.

The dollar is king. It’s the worlds reserve currency. I’m not going to pretend I know the reasons for certain, but I can read what the charts are telling us. Over 22 trillion debt, a cornered FED, a president who is unpredictable, and the rise of Asia are all factors. There are many others. I don’t much care. The charts makes it blindingly obvious what is most likely to happen next (not 100% guaranteed – but most likely). A final dollar surge IS possible, but if it were to happen, I believe it would be short lived. Here’s the USD and GBP/USD charts…

It’s getting late here in the UK. Night all 😉

A question I’ve recently been asked. Cycle analysts have the answer. Asset classes of all sorts have a cyclical nature. The dollar is heading much, much lower in this cycle. I’m still aware of the small possibility of a final pop before the plunge, but I view that as a low probability. The gold cycle is doing its thing now. The chart below gives a rough and ready overview. Don’t take the gold projection too literally, but it works as a rough guide.

Both have zones of horizontal resistance, but the big breakout from the descending resistance is already behind us…

I took a look back at the big 2016 rally. Bear in mind that that was not a breakout move, just part of the bottoming process. As such, the current move could be stronger and longer (unless the whole thing collapses in a pile of dust – pun intended, lol).

This is 2016 and now side by side. Compare and contrast.

We may just burst through the $1350-$1400 zone. It really wouldn’t surprise me at all. Alternatively, we may consolidate around or just above the current level for a while, with a modest pullback possible. With breakouts already achieved in so many major global currencies (including the hugely important Chinese Yuan and Indian Rupee), upward pressure must surely be huge.

Gold in Canadian Dollars…

Stand by for the institutional buying and surge in the mining indices.

Another one to add to the rapidly growing list of global gold breakouts – the Japanese Yen. This is going to cause a surge in gold buying and investment in PM shares.

Still some way to go. Breakout somewhere between 190 and 200 (but declining)

I’m not going to declare the battle is won until DXY climbs clear of $1400, but the evidence that supports that outcome is building. The rounded base breakout is still ahead, but the log chart wedge breakout looked beautiful, complete with a perfect apex backtest. The cup and handle pattern is pure speculation of course.

It’s happened in many global currencies already. The USD basing pattern is the prettiest of the lot. A perfect rounded base, with a ‘zone of turbulence’ on top (in red). At some point in that red zone, we’ll hit a ‘point of recognition’ and PM stocks will catch fire again.

Here in the UK, we’re green across the board now…

Back to DXY, we can zoom in a bit and see some possibilities…

As I’ve said recently, this either takes off as I’m expecting, or it’ll be the biggest failure since the chocolate fireguard 🙂

Whist everyone is fixated with gold in US Dollars…

AUD – New all time highs

CAD – we just need approx. $1775 for a 7 year wedge breakout ($1760 as I type)

EUR – We have broken up and out of a 6 year wedge

GBP – We have broken up and out of a 7 year wedge

INR – We have broken up and out of a 5 year wedge

JPY – Right on the verge of a breakout of a 6 year wedge

CNY – We have broken up and out of a 5 year declining resistance line and are now about to break horizontal resistance

TRYG – Turkish Lira didn’t experience a bear market

NZD – New all time highs

CHF – We have broken up and out of a 6 year declining trendline. We then had a perfect apex hit where this intersects rising 10 year support. Price now rising fast.

Still need convincing ? Consider gold priced in the World Currency Unit https://en.wikipedia.org/wiki/WCU_–_World_Currency_Unit

I don’t often look at the S&P. I just remembered why – I don’t like it’s chartology. It’s a slippery little snake that seems to just want to keep going parabolic (a straight line from bottom left to top right represents a parabolic price rise on a log chart). 50,000 here we come. Question is, do we get a 25%, 50% or 90% correction before then. Damned if I know, but here’s the chart…

Two patterns. One broke out a while back. The other is about to be tested. Bull ? I think so 😉

Following on from Fullys excellent point earlier. Log charts are essential for tracking long term prices. Why ? Because over time, measured in FIAT currency, everything is appreciating logarithmically. What do I mean by that ? Everything is increasing  in price by orders of magnitude. For example, a house here in the UK used to cost a few hundred pounds, then it was a few thousand pounds, then it was a few tens of thousands of pounds, now its into the hundreds of thousands of pounds. That’s the definition of logarithmic – you have to add an extra zero at regular time intervals. Witness the price of gold in Turkish Lira…

This is exactly what is happening not just to the Turkish Lira, but every FIAT currency on the planet. For those of you in the US, think about the price of a house at the turn of the 20th Century, then in the 1950’s, 1980’s and now. Logarithmic ? You bet.

OK, so I’ve shown that gold is breaking out in front of our eyes in all major global currencies. The chart in US Dollars might be the last one to pop. Here’s where we are now…

Lets take a look at gold stocks. I’ve picked GDX, but it’s the same argument for GDXJ and HUI…

So I would be adding to my holdings on the basis we broke above declining resistance in the 21 area. For the record, I went all in when HUI was around 120 in early 2016. Since then I’ve added some Uranium holdings, and a few other random stocks which struck me as good value. As you can see above, gold stocks have a huge amount of catching up to do. They need to rise another 30% to find themselves in a similar position to gold itself. If you are very cautious/bearish, you might wait until we break through that 32 region. A better policy would be to enter when gold clears $1400. GDX should still be well below 32 at that point, but I would view $1400 as a ‘point of recognition’. When we reach that point, I expect PM stocks to make very rapid advances similar to 2016. Here’s a look at the silver chart…

That, to me, is one incredibly bullish looking chart. I see little reason why we can’t be approaching $20 later this year. Seriously, this is unfolding right in front of our eyes and it’s getting little or no attention. That’s good, very good. I would hold tight if you already have a position, or if not, I would start to build a portfolio at the $1400 breakout,  and only sell if we were to move back below the ‘turbulence zone’ marked on my chart. In terms of which companies – I would stick to those listed in the HUI/GDX/GDXJ. I study the individual chartology and try to read as much as I can about the way the company is managed. Personally, I would spread risk across at least 20 miners, so that if one were to go ‘tits up’. it’s not the end of the world. Could we see a total failure here, with gold plunging to $1000 or less ? In a word – yes. I view that as very unlikely though. This has all the hallmarks of the next stage in the PM bull. Good luck to you all.

I usually keep a closer eye on gold priced in other currencies. No matter – at least we all now know that gold is popping across the planet. Canadian Dollars, Aussie Dollars, Euro, British Pound, Swiss Franc, Japanese Yen and Chinese Yuan. Breakouts are happening as we speak, and have already happened in many major global currencies. Does this leave us in much doubt about what is going to happen for gold in USD ?