Goldtent TA Paradise

Just another couple of Dollars and we’ll have a breakout…

Time is very nearly up on this pattern…

Yesterday felt like pressing pause in the middle of an action movie. I just wanted it to carry on unfolding. As I pulled up chart after chart it was clear as day that this is another one of those inflexion points. What follows is (hopefully), a plain-language, simple to understand, summary of where we are right now across the markets and indicators that I’ve been tracking for many years here at our beloved ‘tent’. You can find all the supporting charts in my posts from the last week, both here, and on my Twitter feed.

Gold – Several days ago, I suggested that a weekly close above $1800 (spot price) would likely signal golds intention of a ‘spike’ move to $2000 or more. The alternative scenario was a return to major support somewhere close to $1600. Why ? Because we are now ‘stretching the elastic’ in terms of the technical indicators and distance from supporting moving average. To me, that suggests that history will repeat allowing us to achieve our measured move targets (as outlined in all my posts), or we sink back to major support before the move to new all-time highs. Make no mistake though, we are in a PM bull market. Cycle theory for gold has proven to be 100% reliable since the 1970’s and the US coming off the ‘gold standard’. It predicted a major cyclical low around 2016, and then again in 2032. That means (depending on how right-translated we are), I am expecting the main 16 year cycle high to be somewhere in the late 2020’s.

Back to the here and now though – we are sitting above that $1800 level, but below what I believe to be the last hurdle to those all-time highs. If you look back at 2011, there are 2 monthly closes in August/September around $1820-$1825. Both of those months saw price spikes above $1900. We’re currently in a price channel, which goes back several weeks, and we’ve been climbing a series of ‘steps’, breaking through overhead resistance levels. I showed that $1810 is one such resistance level. That’s PRECISELY where spot price closed yesterday. In yesterdays chart, I showed that the technical indicators are lined up for a bullish, upside resolution. If I’m  right, we’ll burst through and advance towards channel resistance up around $1850/$1860. Just because we’re in this channel, it doesn’t mean we’re not able to break upwards out of it. If ever there was a case for breaking up from an up-trending channel, this is it, with the pull of new highs acting like a magnet. This is likely to get worldwide attention from the financial media, stirring some general public awareness for the first time (they will not act yet though – many believing it won’t last and this is actually as high as it will go).

Flame out – Just as social media goes nuts over this, we need to expect that large drop back towards $1600 to reset sentiment for the next stage. This ‘flame-out’ is needed to reset all of the over-stretched indicators and allow the moving average and price to ‘re-connect’. I rated this ‘spike’ scenario at 70% a week or two ago, then dropped it to 60% fearing the correction ‘odds’ were increasing a little. I would now rate it at 80%, with the sudden reversal to $1600 at 20% probability.

The correction, when it comes, will probably last several months, but don’t forget, this is a PM bull market, and much higher highs lie ahead – this will have the added fuel of wider institutional and public participation.

Silver & The GSR – One thing that myself, Patrick and others have been saying for a long time is that when the Gold/Silver Ratio drops from it’s multi-century highs you should re-balance your portfolio towards silver and silver miners because you are guaranteed to see higher percentage gains there, compared to gold. That is exactly what has happened/is happening. The gains in SIL/SILJ are out-pacing GDX/GDXJ. Just look at Americas Gold & Silver and Hecla yesterday alone – up approximately 10% and 8% respectively. The GSR has broken down through long-term support, with much, much further to fall, just to get to more historic norms, but, as per previous PM bull markets, it will fall below that to form the cyclical low. That point will be another milestone (not the end) of this PM bull. I’ll be posting updated charts at regular intervals. I now expect to see silver above $21 in coming weeks, and probably somewhere in the mid $20’s.

GDX/GDXJ/HUI/SIL/SILJ – All moving up fast, with silver miners out-performing. See my posts for targets, e.g. $54 for GDX Some miners are now making historic moves. I’m not exaggerating when I say that, Hecla for example – if it closes the month above the $4 level it will have completed an upside breakout from a pattern which has contained it for over 50 years !!! If that isn’t telling us something very significant is happening, I don’t know what is.

US Dollar – Up/down ? I have no bias here. Gold can (and has been) rising with a rising Dollar. More recently DXY has turned down again. You’ve all seen my do(o)med Dollar chart. It is what it is (until it isn’t).

Uranium – Commodities are set for a massive bull run in coming years. Infrastructure projects are being promised on a large scale here in the UK, and I believe governments around the world are likely to do much the same as recent events threaten mass unemployment. Uranium mining shares are down 90% or more from their peaks. The fundamental case is strong and, like the chart for Hecla, we’re seeing multi-decade breakouts across the sector. This sector excites me with it’s explosive upside nature. Like silver, the thinly-traded nature of this sector reacts violently to a tiny shift in investor sentiment. If buying breakouts is your thing (and it probably should be), there is value to be found here – Energy Fuels, Nexgen, Cameco, UR-Energy, Fission Uranium and Mega Uranium are just a few worth taking a look at.

Crypto – Again, I have no preconceptions here. When they take off to the upside, I tend to post charts of a few different crypto-currencies. Many are correlated to the price movements of the big-daddy, Bitcoin though, so I’ve been focussing on that. My Bitcoin chart has remained unchanged for quite sometime. It’s been highlighting this month as decision-time. In fact, it looks highly likely that we will see a decisive move next week. The chart and technical indicators make me think the break will be upwards, targeting $15,000 initially.

So the remainder of this month looks like it will give resolution to some very important questions. The journey from $1050 gold to here has been a steep learning curve (a bit like the ‘golden arc’ I first posted a few years ago, lol). I’ve fine tuned my methods, but those that have gone before us have left a wealth of information to learn from, so I’m grateful for all of their efforts. The posters here and on Twitter are fantastic – this isn’t a competition, it’s all about helping each other to navigate these markets so that we can invest successfully. Ego, really has no place in all of this, and when I hear overly dramatic language and sensationalism its a big red flag. Yes, it can be very exciting, but that’s precisely when you need to stay calm and measured in your approach.

Wishing everyone a great weekend

Looks highly likely we get a significant move (one way or the other) next week.

I’ve been posting this chart for a long time now. It’s still doing what I’d expect it to, and I still expect the US Dollar to fulfil its cyclical destiny…

The chartology tells us the odds are stacked in favour of an upside breakout. $1810 resistance is unlikely to hold for very long.

…but Hecla Mining has a 50 year breakout. Yes,, that’s right 50 years !!! A monthly close above $4 will seal the deal

EDIT – Up nearly 8% today

…Northern Dynasty has broken out of a 10 year falling wedge.

EDIT – Closed the day up nearly 13%

Cameco continues to make very solid gains. Others in the sector are moving even faster today – Energy Fuels is up over 9% for example. I hope some of you are on board and taking advantage.

EDIT – Cameco up 5% today and Energy Fuels over 11%

Edit – Gold chart added. The channel going back several weeks is intact, with a bounce exactly where we needed it – a break of the recent resistance looks imminent, opening up a move to $1850 or more. Note – once past the $1825 region, things could accelerate and take us out of this channel rapidly.

Edit – Added gold in Canadian Dollars…

Up another 4% in the pre- market.

In currencies around the world, gold is pushing upwards to ever higher, new, all-time highs. This bull market in precious metals has many years ahead of it…

As expected, silver is moving quickly. Up over 150% since March.

The bullish flag and arc have combined to give us some very good profits in the last few weeks. I see no reason to be anything other than long term bullish here.

Edit… 6.25%

The gold/silver ratio is breaking down again, as silver surges

I’ve made my views in support of Covid-19 preventative measures in the UK clear, but I think we’re losing the plot now. I’ve seen so many people wearing masks outdoors and in their own cars lately – what the hell ? “Now the government have said mask wearing in shops will be compulsory.  Mask wearing in pubs, restaurants, cafes, bars isn’t necessary though… what??? Seriously??? Either they are lying and the risk is so low its not necessary (as in pubs) or its so high that it is necessary (as in shops).  You can’t have it both ways. This is just stupid.

It’s that chart again – still going strong after all this time. I’m watching closely for a drop below 96, then 94.5

Gold/Silver ratio has hit support. After initially falling below it, the ratio has recovered, and is pausing – waiting for the next move.

Still unclear, but as time passes, downside risk increases. A breakout of this pattern would be bullish of course, but a breakdown clearly opens up the [possibility of a much larger drop.

…don’t take your eyes off Bitcoin

…and it has been for some time now.

Remember – The GSR tells us that silver and the silver miners (especially juniors) would outperform massively if this unfolds.

Edit – Silver chart added. We’re not there yet, but a weekly close above $19 would do it

Are in the rear-view mirror until the next significant correction comes. The Gold/Silver Ratio told us this was coming.

I’m keeping an open mind. We cannot just assume we’re going to see the virus fade away in coming months due to herd immunity.

https://www.google.com/amp/s/amp.theguardian.com/world/2020/jul/12/immunity-to-covid-19-could-be-lost-in-months-uk-study-suggests

…and a bonus chart from the Uranium sector. Next week is probably the most important week this year. We’re going to find out if we get the ‘spike to $2000+’ or the ‘plunge’ It all hinges on a convincing move beyond the resistance line on my chart below. The resistance line is now moving directly to the level of the previous highest monthly close in the $1820-25 region. Funny how things line up isn’t it ? I don’t like the bearish rising wedge appearance to the recent move, so I’ll be ready to act fast (there are other ways to draw this chart, with a rising channel also a possibility, if you ignore the March panic drop). With that in mind, I have to say my bullishness is wavering. It would make a lot of sense to drop back to strong support in the $1600 region. All in all, considering spot failed to close above $1800 yesterday with some stretched indicators, I’m reducing my upside breakout probability to 60%, with the downside correction as an increased 40% probability. Remember, gold price is not too stretched above the moving average in historical terms – there is scope to move beyond $2000 before we get to that point. Also, the gold/silver ratio looks supportive of further gains. GDX is also part way through a reverse symmetry, measured move back to around $54. Quite a lot to think about, and plenty of reasons not to take your eye off the ball next week.

I have a lot on next week, but will post whenever I get the chance. Good luck.

(chart taken from Twitter).

Inevitable with all the extra cases I guess. I hope it’s temporary and we see an ‘around the apex’ move down.