Loading ...I’m quite surprised (but very happy) to see all the bearish sentiment and caution. The miners have lagged during golds latest $100 move up. Frustrating, but I’m confident they’ll get the memo soon. How did gold look at the start of the last bull run ? Take a look…
And how does it look today ? Well, you guess it, just as good. Even the percentage gains are very similar…
It takes time for the young bull to be steady on his feet, but soon he’ll be running 
I was going to take a look at where we might expect gold price to drop to if we are indeed at the start of a new bull. After Redlabels post, I decided to have a look at how the 20 and 50 month simple moving averages behave. I’m happy to say that everything is progressing according to the script. 20 MSMA is somewhere around $1270 at the moment. Of course, as price rises above this, it will drag it upwards. Here’s how it looked at the start of the last bull in 2001…
and here’s how it’s looked over the last 16 years or so…
and for a close look at where we are right now…
One chart…
Edit – As each cycle comes along you can see the relative value of the dollar declining. This is the slow death of the world reserve currency taking place in front of our eyes.
I’ve taken another look at where gold price might be expected to go by the time it peaks in the mid 2020’s. I’ve used the log chart. Why ? Because we’re ‘measuring’ the value of gold in dollars here, and dollar ‘creation’ is taking place at an exponential rate. Just take a look at the chart for US National Debt. The lower range of possibilities on this chart gives us something around $3000, whilst the upper range takes us 10 times higher than that ! Not much of a forecast you might think, but it’ll become clear if the higher target is a possibility as we go along. If we were to break the old highs either this year or next, for example, I’d say these higher numbers come into play, with several years of rising PM prices in this 16 year cycle.
As far as the mining indices go, I took a hurried, late night look at it yesterday, and messed it up by putting support lines in the wrong place. Stupid error, but having looked at it more closely, I’ve realised that the final target is pretty much anybodies guess. It is almost certain to be many multiples of the current values. HUI is currently just above 200, and needs to jump to around 280 to be where it was the last time gold was $1350. From there we should expect to move past 600 and if gold moves to $3000, what do you think is reasonable ? and what if we get $5000, $10000, or more ?
Here’s the chart…
I’ll take a break now. It’s been a long day, and I could do with a drink 
As promised…
300% in 6 years isn’t as crazy as the cryptos, but an average of 30-50% per year is pretty respectable.
EDIT – THESE ARE WRONG TOO ! I’M HAVING A BAD DAY, LOL. I’LL POST SOMETHING SENSIBLE IN A MINUTE
Please don’t laugh. If this comes off, we’re looking at almost 600% gains…
GDX and HUI to follow.
EDIT – IGNORE THIS. I MESSED UP. I SHOULD’VE TAKEN MORE CARE. LINES ARE WRONGLY PLACED !
As the old saying goes, history may not repeat, but it rhymes. That’s especially true of financial markets. They’re governed by human behaviour, investment cycles, peaks/troughs and above all, a degree of mathematics. All very interesting, but so what ? Well, it means that we can look back at earlier investment cycles to get clues about where we’re going in the next few months/years. This works less well for day to day trading, because there’s all sorts of ‘low level noise’ which can cause short term ups and downs. For example, a political event or statement of some kind. All of that just amounts to ripples in the ocean though, and they’re drowned out by the larger forces at play.
In the modern monetary and financial era (post Bretton Woods, and more importantly when you’re talking about the dollar, post gold standard in the early 70’s), there have been 3 complete dollar cycles. We’re currently in the 4th. we can look at the 3 previous cycles for clues. This is what I’ve concluded…
Here are the charts. Look at what happened in 1977, 1985 and 2002. Then look at what’s happening now…
1977
1985
2002 and today
One of my old charts in the post below, prompted me to do a bit of an update. Looking much the same (toast).
As gold makes another move up, I thought it would be worth looking back at some of my bigger picture charts. Similar (in essence and in terms of general direction) to Graddhy, Spock, Surf and others. They might be useful to you, they might not, and they do offer more than one eventual price target. Many of them are months old, but they do seem to be on track. Hope you find them useful
Gold breaking out…
Dollar breaking down…
As a reminder. This is what comes next…
First things first though. Lets clear $1400 and my first target is somewhere in the $1500-$1550 range.
Heading in the right direction for goldbugs…
Another view of the gold chart. There really are a million ways of looking at it (the vast majority look bullish to me)…
I can quite easily see the eye is drawn to that 20+ years of sideways action and the two red triangles/blue boxes, and you could ask why not another 20 years of gold prices going nowhere. Cycles suggest continued upward momentum, and national debt/stock markets/silver-gold ratio and a long list of other things suggest it would be very hard to avoid an inflationary event and rapidly rising PM prices in the next few years. Others disagree of course
3 Charts to illustrate the point…
As the penny drops, we’re going to simultaneous resets taking place. Stock markets worldwide are heading for one hell of a correction at some point. All of that inflation (in the everything bubble) is going to spew out into the real world. Commodities are set to surge as the cycle takes hold. This will bring price inflation in tandem with the rapidly decreasing purchasing power of the dollar. The shit is heading for the fan at a pretty fast rate now. You might want to duck.
So guess what ? PM’s are going to shine. All this patience and waiting is going to pay off between now and the mid 2020’s. Lots of excellent discussion and charting on this site should guide everyone through it. There will be sizeable pullbacks on the way (worth taking profits). I expect to see king dollar lose another 10% or more, gold $1550, silver low to mid 20’s, HUI 300+ all in 3-6 months. This is where it starts to get interesting
Especially for Fully (glad to hear your Ass has thawed out nicely btw).
Glass half full, and taking a broader, ‘big picture’ view…
I saw this in an article yesterday…
So we all need to be really worried, because QT (rising rates) means that gold is dead in the water. I’m calling bullshit on that. Forgive my hand drawn overlay, but I did it very carefully, and stretching back to 1975 there are plenty of occasions when rising rates have coincided with rising gold price. Their chart only goes back to 2007. What it doesn’t show is that from 2004 to 2007 rates rose from 1% to over 5% and gold advanced from $400 to $700. The same thing happened in the late 1970’s and mid/late 1980’s. The same thing is happening now.
Rising rates aren’t always good for gold, but they often are. We don’t need to think that QT will be bad for gold. Between 2000 and 2011 gold rose from $300 to $1900. During that period we had rapidly rising rates, rapidly falling rates and prolonged low rates. I hate it when writers make the facts fit their agenda. You always need to look back through 2 or 3 full financial cycles before you can even begin to draw conclusions.
By combining traditional TA, careful use of indicators, and cycle theory, we can develop a level of confidence in the overall trend on a timescale of months to years. Here are 3 charts which do just that:
1) TA
2) Indicators
3) Cycles
Does this mean it’s impossible for something to happen which takes the price of PM’s down ? Not quite, but it’s all about probability and confidence levels, just like my day job. Right now, my confidence level that PM’s are heading substantially higher in a new bull market are high (above 90%). Many here are aware of this, but the investing public and big institutional money are distracted elsewhere. That’s a good thing at this point in the cycle. Contrast this with the stock market and cryptos. Hang on to your hats – the next few years into the mid 2020’s could be pretty wild.
I’ve marked 4 fairly simple resistance lines on the HUI chart. Worth keeping an eye on. If gold continues much further, we could see a surge in the miners (maybe 10% in a couple of days).
Just thought I’d share a few simple price charts. These are Uranium stocks I got into a few months ago. The worst performing (Energy Fuels) is up 12%, and the best (Uranium Energy) is up 78%. Most have barely even see a blip on the long term chart. It’s a risky sector, but the risk/reward looks pretty good to me at this point.
I posted it last Summer…
I also posted this…
along with this…
all of which led me to speculate with this chart…
I believe all of these charts are still relevant, and I’ve just taken another ‘big picture’ look at where we’re heading. I’m very much on the same page as Spock, Graddhy, Surf etc, who are proponents of cycle theory. This is what I’m seeing…
The numbers do look far-fetched at this point. I’m less confident about specific numbers/targets than the fact that we are going to see large/very large gains in the next 7 or 8 years. We’re short term overbought on many of the indicators right now and a healthy pullback can be expected sometime in the next few days. Long term chartology seems very clear to me though, and unless important support lines fail, I have no reason to doubt the thesis that we have a very large cyclical bull ahead of us, peaking sometime in the 2025-2026 timeframe.
Even to those who have been doubting it. We’re right at the point now, where gold and the US Dollar are about to cross a very important line in the sand, at exactly the same time.
First the log chart of gold. A clear breakout above $1300 in the current (upward trending) portion of the gold cycle is hugely significant…
Secondly, the dollar is now past it cycle highs and is on a long term cyclical downtrend. My personal view is that it will fall to between 60 and 70 as the cycle bottoms. Shorter term, the target is around 80…
2018 is going to be a lot more ‘fun’ than 2017 was. Many other commodity sectors are going to see increasing inflationary effects too. The uranium miners are up 30-60% since I read Graddhys posts a while back, then did my own research and took a position. On a long term view they have still hardly got going. I know they’re volatile, but risk/reward looks favourable to me at this point. The world doesn’t seem prepared for what’s coming. So much debt and so many bubbles everywhere you look.
Well, it’s looking increasingly likely that the PM complex has made it’s December low. I must admit, I was expecting $1200-$1220, but we got the timing right (it seems). So where to now ? I’ll be posting my thoughts in the New Year, as we start to see things developing. In summary though, I’m on board with the dollar bears and commodity bulls now. As Graddhy has very cleverly spotted and pointed out, we may well see the stock market and assets generally continuing to rise sharply in their blow off phase, with the PM’s sniffing out the coming mess and rising as well. I believe the smart money will be taking positions in commodities (the upside for Uranium miners for example, is quite impressive). Cryptos ? damned if I know, but I have a small position just for the hell of it, which has now brought a 1200% profit in 6 months.
I’d like to leave you with a gold chart. Once we clear the $1295-$1300 region, things will get interesting. You might remember my initial target is $1500-$1550 in the next few months.
Wishing you all a happy Christmas (for those that celebrate it), and a peaceful 2018, NS.
I bought £50 worth each of Bitcoin, Litecoin and Etherium back in the Summer. I sold the Bitcoin at $18000 with a 600% profit giving me £330 on my original £50 investment. I felt it was a huge bubble and wanted to test the process of getting it back as ‘cash’ in my bank account. It all worked fine. I decided to let the total £100 Litecoin and Etherium investment continue. Litecoin gas gone up 101% today (at time of writing), 267% this week, 518% in the last month, and 9608% in the last year. THIS IS BATSHIT CRAZY. My £100 Is £1000 already. WTF is going on ???
In response to Kens request…
The thing here is that in a dollar bull market you can draw a conclusion that doesn’t apply in a dollar bear market.
In response to Kens post below, here’s an alternative view…
Hello again fellow Tenters. You might remember this. I posted it a while back now ( mid September)…
Well, shit got real, as they say. This is how it’s panning out…
All looking good to me (but I am hiding behind the couch and peeking at the screen between my crossed fingers)
Meanwhile, buttcoin to infinity
It looks like a plunge to $1200 gold is certainly a possibility. That would take us back to test the breakout at the apex – see my chart on the right sidebar. I strongly believe we’re going to see a great year for gold and silver in 2018, but we may have to endure more short term pain as PMs and PM stocks drop hard into year end.
There’s quite a debate going on. Bull or bear ? Here’s a recap of some of the charts I’ve posted in the last year or so. I think they’re all still very relevant. Everything from the dollar to the SGR and CHF. Patterns, targets, cycles. Make of it what you will…
If that is indeed one enormous bullish pennant, 2018 is going to bring us some real fireworks. The bear case takes us to less than $1000, but I just can’t see how that’s going to be possible when you take the cycle timing into account. Surely that’s the big clue that this thing is going to explode upwards, rather than collapse into a smoldering pile of donkey dung. Fully is our donkey expert though.
Downside on this chart appears to be about $60 (assuming that rising support line holds). Upside is $200 + in the relatively short term. A correction should follow an initial move to the $1500-$1550 area, before we head higher again. I could be wrong of course, but that is what the chart looks like to me at this point. We could begin to move higher anytime I guess, but timings look to suggest further weakness into December. The similarities with 2007-2009 are too striking to ignore. Here’s the chart…
Apologies for going ‘AWOL’. Tough times at the moment, and it certainly puts everything in perspective. Anyway, one of my last posts in September included this chart…
Having been just an observer on this site for a few weeks, it’s good to have a few minutes to be able to update it…
If I had more time, I’d add more supporting evidence (cycles, indicators etc), but suffice to say that it still looks like a bumpy ride into year end for gold and silver. Of course, it’s possible we don’t go quite that low, but the chart does suggest it’s likely. As many have noted the commodity sector is hotting up. Base metals breaking out, rare earths are stirring and uranium is following Graddhys script very nicely. Bottom line is that inflation is set to move into these sectors more convincingly over the coming months and years. The SM blow off phase looks to be underway with a smaller and smaller number of ‘big names’ blasting higher, whilst most are already showing weakness. It’s so well anticipated that when it happens, the rush for the exits will see a big move into undervalued sectors and traditional safe havens. 2018 looks set to be a big year for us. I may be mostly absent for a few more weeks, but I’ll be keeping tabs on everyones amazing posts with interest.
Here’s my take on the COT position…
And the gold price…
