Loading ...Gold up, dollar down, but only for a short while
I predict the dollar will fall to 91, gold will rise to 1360-1370, over the next 2-3 months, then the dollar will climb to 102 or higher, and gold will fall to 1050 or lower. I see no reason for gold to start another long term bull market in the present economic environment.
Not a popular view right now, but I agree. A dollar dip and then a significant climb.
I love it. It- technical discussion for price projection.
AP what is your basis for this forecast if you may want to share here?
Current EW count is aligned with your forecast. That may change as price changes.
Dollar is building out a H&S bottom while gold is unable to break out of upside resistance at 1360/1370. Looking at the economic background I do not see anything approaching a booming economy to support a rising gold price. I see the opposite long term, which will force debtors to be scrambling for dollars to pay debts.
You are anticipating an inverse SHS pattern for the dollar (LS- Sept 2017, Head- dollar bottom early 2018, RS under construction) When finally complete (if it happens) the inverse SHS will have been a year, possibly longer, in the making. Big patterns = big moves – Rambus. Something to watch for, for sure. I think Fully mentioned that as a possibility as well.
That plus I keep reading about gold hitting bottom for the current cycle, so for gold to reverse the dollar needs to fall. Looking at the symmetry of it all it looks likely that the dollar will go down for the next couple of months, thus giving gold bugs cover for a rally (which they will tell all who are listening is the start of a new bull market in gold). Been there, done that. I started looking at gold back in 1968.
In your opinion what’s in store for the economy, AP?
A deflation scenario: Asset deflation in year 2019. Stock bubble. Bond Bubble. Real Estate Bubble. Pop! pop! pop!
And the metals flop too because interest rates go up! up! up! Job opportunities hard to find, cash is scarce.
Central bankers panic. Helicopter money. Attempt at reflation.
Hard assets, including gold, soar…
Well, that’s what some folks imagine for the future. Can’t say they are wrong. I half expect it myself. I suppose your expectation is more balanced, AP. However, if the dollar scoots up to say, 120, the house of cards will likely tumble IMO. Too much debt.
Will the bankers keep the dollar low by continuing to inflate the bond market? (more asset inflation) Or will they pump the brakes, let the dollar rise, and deal with the inevitable consequences? (asset deflation) It seems they are damned if they do, and damned they don’t. Trapped.
We might seesaw for awhile, waiting for a trigger.
In that case, what we CAN do is ride the waves. And it does look like we are about to have a rally wave in the PMs.
So, anybody want to try surfing?
That’s my rant. Done.
Respectfully disagree with your interpretation that the $US must fall for $Gold to rise. There are many instances to the contrary since 1968. In 1968 Gold was $35 an Ounce and the $USD index was 100 if I remember off the top of my head.
We keep coasting along for as long as a year or more, then suddenly fall off a cliff. Either that or a gradual slowdown that leads to a recession, which devolves into a depression. I look at multiple economic cycles as well as fundamentals and the like, and also our preponderance for repeating history. 1928 = 2016. 100% Republican control, growing trade wars and Federal Reserve shenanigans. Right now the FED is reducing their balance sheet at an accelerating rate, as well as raising interest rates. All juicy grist for the mill, Fourth Turning stuff. My best indicator is the flattening yield curve, based on 10YR-1YR, which has a perfect recession prediction record going back to 1970.
https://fred.stlouisfed.org/graph/?id=DGS10,DGS1 click Max once the page opens.
If you want to invest in gold, buy KL. seems to be impervious to the ups and downs in the gold price. New high today, although it is reversing. Ah! Gold sold off, dollar rose. Been busy doing other stuff, didn’t notice.
Same outlook and navigational markers here, AP.
My sense too is that Trump can nudge the real economy with his deregulatory moves, but the globalists control lending, money supply and the credit cycle. With those tools, they can trump Trump. And while it would be risky for them and the banking system they own, Trump on the offensive (Russia, NATO, trade wars, internecine Deep State tussles, etc) ultimately threatens them at their core. So they probably would rather sink him and go down with the ship than let him prevail. He’s said what’s on his mind (during the campaign), and with each passing month and what he’s achieving, obstacles in his path are being overcome. He can’t be hasty about it … all things in good time … but he probably WOULD reinstate a monetary role for gold (assuming Ft Knox allowed for it.) That is his mindset.
Medium term, I’m seeing a decent chance for an interim $ high after Labor Day. That sparks EW C up of B up of IV before the big tumble. Between now and then, PMs tumble further.