Goldtent TA Paradise

We could be about to see one hell of a spike in price, but it’s not guaranteed. Be ready.

Looking for clues as to what’s happening at the moment. The gold/silver ratio appears to be back-testing its breakdown. If so, it’ll stop at 97.5, then PM’s will continue to spike. I’ll be more concerned if we fail to close the week above $1800.

There are plenty of charts targeting $2000 or more in the very near term. If this happens, I’m pretty sure it will appear as a spike on the charts – probably a wick on the monthly candle. It would occur on a sudden bullish surge generated by macro factors in the wider economy and a spike in inflows and investment in the sector. Spot silver is challenging the all-important $19 level. If it succeeds, it should lead to a rapid $2 run. GDX seems to be surging like the proverbial beachball held underwater (target around $54).

This is all great BUT, as I said yesterday, we can’t get carried away with all of this. Think like a bear now, if you want to trade the coming correction. Look for every possible barrier and get out if the charts tell us to. With all of that in mind, here are the gold, silver and GDX charts. Most important, the gold chart…watch it carefully in coming days.

My strong advice now is to be on alert – look for warning signs. This should be the last surge before a sharp pullback. Something to consider though…

They all tend to move up when Bitcoin moves up, so let’s look at the evidence…

I have to conclude that the chart evidence is VERY STRONGLY suggesting a LARGE upside breakout will happen in the next few days. At this point I’d say it’s 90% in favour of an upside breakout, with a small 10% risk of a move down and below the curved  ‘arc’ support. If/when this happens it’ll be breaking out of a very long term pattern.

Edit: Big Picture…

The gold/silver ratio is breaking down again. IF it crashes back through long term support/resistance, it could easily be headed into the 80’s very near term, which if gold was at $1900, would imply silver in the mid$20’s rather than low $20’s…

Well, it’s been a hell of a ride these last few years. Goldtent regulars will have seen my charting develop over the years. I’ve never claimed to be able to predict the future with 100% certainty. As a weather forecaster for over 30 years I’ve developed my craft and extended it into the world of financial forecasting. The techniques are very similar. Gather the evidence, apply suitable weighting and calculate ALL possible future outcomes, assigning probabilities to each outcome.

In the world of weather forecasting we have incredible supercomputers performing trillions of calculations per second, allowing us to view every scenario that the future may bring. In some circumstances, almost all of those scenarios are similar, allowing us to have high confidence in the forecast. On other occasions, when there is a lot of ‘chaos’ in the atmosphere, we may see many possible future outcomes, all with similar probabilities, which makes it hard to have any confidence, or forecast much more than a few hours ahead.

This brings me to my first point. I should say here, that what I’m attempting to do in this article is to try and pass on some of the things I’ve learned over the years, which will continue to help guide us through this turbulent phase of global finance/economics. OK, so point 1, If anyone here, or on Twitter, or anywhere else tries to say that this or that is definitely going to happen, and anyone with a differing view is an idiot, then you should give less credence to what they’re saying. Anybody who fails to accept that almost nothing about the future is 100% certain is incredibly naïve.

I became bullish on the PM sector as we reached the 16 year cycle low in early 2016, and posted this about 3 years ago in 2017…

More recently (about a year ago), I posted this (ignore the reference to ‘waves’, I’m no Elliot Wave expert. I was just experimenting)…

Both illustrate the power of charting (you may have seen me use that phrase in my posts yesterday). The charts can provide multiple pieces of evidence, with each ‘technique’ providing it’s own possible outcome or future scenario. This is just like forecasting the weather, except we’re having to do it manually. The second chart in particular, shows several pieces of evidence for the overall trend…#1 the 8 and 16 year cycles are providing ‘lift’ to the gold price #2 I’ve identified a rounded base or arc formation at this cyclical low, with price bouncing off the arc and confirming its relevance #3 price is trading in a defined (in this instance, curved) channel #4 I’ve identified the zone where there is likely to be pullback into the 8 year cycle low

The charts have led us all the way from $1050 to $1800. I chose Northstar as a pseudonym because the charts are guiding us and lighting the way. This brings me to point #2 and the entire reason for this post – what next ?

As social media lights up with calls for ‘to da moon’ and everyone gets excited, we need to mentally prepare for a sizeable drop. It could play out over many months, forming a ‘handle’ on the cup which has formed since 2011. That is by no means a certainty though, and the pause/correction/pullback could be relatively short-lived. As always, the charts will let us know. I’ve been consistent in my calls that the odds were very, very strongly in favour of a return to $1800+ now that we’re here, we need to turn defensive, just as everyone else is turning bullish. If we fail to close this week with spot gold above $1800, my 30% probability of the correction occurring now will come into play, otherwise the probabilities favour a swift move to between $2000 and $2050. At the same time, the gold/silver ratio should drop a little, allowing silver (and the silver miners) to outperform (although I expect this to be more marked after the coming correction). The mining sector in general, has a lot of catching up to do. GDX is in the process of completing a ‘reverse symmetry’ move back to somewhere around $54 (currently around $38). At that point silver should be in the region of $21. So there you have it, $2000-$2050 gold, $21 Silver and $54 GDX. Lets just see if we can close the week above $1800 – there are probably some ‘evil’ forces who would like to try and prevent it.

So how far will the next correction take us ? The most likely spot in my view is back to our friend the ‘arc’ support – it’s what brought us to this point after all.

And finally…

Once the inevitable correction has taken place, I believe the evidence as shown in my second chart above, remains true today – there is plenty of time to move to the next Fib extension level (I’ll be looking at this in the next few days/weeks), well beyond $2000. You can ride out the coming drop, or (like me) do your best to take some advantage from it, but the 8 year cycle low comes up in early 2024, so if we spend 6 months dropping to that low, it means we have until sometime in 2023, with price continuing to climb. The post-2024 drop, is likely to be followed by an epic bull run, but that’s for another time.

Trade the charts, not what you think/believe/hear – they’ll light the way and you shouldn’t go too far wrong.

Spot gold just broke through $1800…

– I’d like to write a more detailed post about where we’re at and where we’re going in the PM sector. It’ll be too large to put on my Twitter page. I have quite a large number of ‘followers’ on Twitter (surprised me) – do you mind if I signpost it there, so they can read it on here, or would you prefer I didn’t ? No worries either way 🙂

Carving out a series of classic, bullish chart patterns. Up 100% since March…

…another chance for spot gold to close above $1800. If it does, we should move rapidly to $2000 or more. We’re breaking out of a bullish flag-type pattern…

Attention will then rapidly move to stepping aside and taking profits (unless you just want to ‘ride it out’ of course).

Another bullish looking Uranium miner…

Edit: Fission Uranium charts added…

Edit: Mega Uranium added (the big picture chart, and the ‘zoomed in’ chart)…

Well, we have the breakout I was expecting…

Barring a rapid reversal, this is very significant.

It’s all in the charts. The big picture is less important at this point, it’s the hourly charts that matter. They will give us early clues whether $1800 is going to be breached to the upside.

I’m still mindful of Surfs bearish interpretation of this flag/pennant/triangle, but, if anything, I’m becoming more and more bullish that we’re about to see an upside breakout. It’s gained several percent and doesn’t look to me like it wants to stop. Time will tell, and I’ll be ready to hit the ‘sell’ button if it starts to tank because I’ve made a tidy profit so far. Many other Uranium miners are similarly on the verge of breakouts.

It looks as if spot gold wants to make an attempt at $1800…

Below are 2 charts. One I posted 4 hours ago, and the updated chart next to it…

A resolution looks likely before the end of the month

Here it is again. This chart just won’t die…

Stage 1 still in progress. A breakout here will target $20.50 – $22 and that will be the end of the beginning…

I was lucky the first time around, and managed to make a really good profit. It’s being kind to me again. I just love this chart…

Entering the red zone with room to run in terms of distance from the 60-day moving average

Thank you to Surf for your thoughts on this one. I hold about half a dozen Uranium miners – all are very nicely in profit. I’ve been watching for confirmation of the next move, and Surfs bearish take has re-doubled my vigilance. This is a seasonally weak time of year for this sector, so weakness wouldn’t be at all surprising. I’ve been looking to Sept/Oct/Nov for more positive price action. These things are so volatile, so it would be a very good idea to step aside the moment the support line is broken. Anyway, I’m holding for now. Here’s my chart…

… but, how many medical staff and care home works do you think die from flu in the UK each year. Very, very few of course. How many died as a result of Covid-19 ?…

Prime Minister’s Questions usually begins with an update on the number of NHS and care workers whose deaths have involved Covid-19. On 20 May, Boris Johnson said the current figure stood at 181 NHS workers and 131 care workers, meaning the death toll has now passed 300.

That’s a stark reminder why it was essential to stop the community transmission rate (r number) staying above 1 as the case numbers soared. It kills 100 times as many health and care workers (despite all the prevention measures) than flu.

Scaled-up for the US that would be 1800 health care workers dead. Imagine the outcry if 1800 of your sports stars died in 12 weeks. Just because they are Doctors, Nurses, Surgeons, Porters, Care Staff doesn’t make them expendible.

Just my take.

Bloomberg Commodity Index is on the move…