Loading ...More On The Current Reverse Symmetry Move And What May Lie Ahead
I find it interesting that the support line for this move is at the same angle as the support line on the 2012/13 price collapse. It will vary from platform to platform and depends on how zoomed in you are, but on my chart it’s 77 degrees. However you choose to view it, the angles are the same. The MACD might be setting alarm bells ringing, because it looks like it might be heading for a bearish cross. However if you look at what happened on the way down, there was a mirror image – it looked like we might get a bullish cross. It never happened. The trap door opened and the MACD continued it’s plunge to somewhere around -98. There is no reason why the same can’t happen on the way back up. That would give us an extreme MACD reading close to +100 at the precise time that gold price (given the 77 degree angle of ascent) approaches $1800 – early 2020. I think this is now my ‘base case’ (most likely). Should this happen, that would be the time to take profits off the table. I would expect a ‘sideways chop’ for many months, with some good entry points at lower levels, allowing for some better gains in the years ahead.
I think I might know what would cause this to happen. I think we’re going to see a number of interest rate cuts in the Sept/Oct/Dec FOMC meetings. You might view these as ‘insurance cuts’, trying to hold back a recession. That would fuel the move to $1800. We may get a pause of some kind, to evaluate the effect, hence gold pullback/sideways price action. In my view it won’t be enough. At that point, we’re going to be up to our necks in a foul smelling pile of self-inflicted dung. With nowhere left to go, I think the Fed will dive into negative rates and all out quantitative easing, or some disastrous equivalent. That’s when we will have $2000 gold in the rear view mirror. There are other possible ‘black swans’ that could cause gold to hit the launch button before then (China for example). However it unfolds, I think it is very likely to take place in late 2020 or 2021. After a rapid ascent towards, maybe $3000, we have the mid-cycle pullback at the half-way point in the 16 year gold cycle. It’s likely that sometime in 2022 or 2023, we fall rapidly into a 2024 low. From that point onwards, through the mid/late 2020’s gold should continue to appreciate rapidly versus the US Dollar. All my own personal views, so no guarantees (a bit like forecasting the path of a hurricane – perhaps we should get the Donald to help us with his marker pens…).
To be honest, this is one of my scenarios too, but I even consider 1900$+ gold to be possible after correction from $1800 in Q1 2020
Yes. an ‘overshoot’ towards the old highs is entirely possible.
Nice chart NS. That would be a nice New Year’s gift indeed. Hoping the miners play a lot of catch up.
Thanks AM. You’re right, silver and the miners have lagged, but all of my research is pointing towards a turning point between now and the end of this year. I think the coming series of rate cuts will do the trick. Final proof (if any were needed) that it wasn’t a ‘one-off’.
But we have to correct bullish sentiment before next upturn. Gold has hardly corrected. We could fall to $1450 to put us back in July/August range. This would seems quite logical to erase last up spike in gold and gold stocks. This means however we could see gdx 24.50 to 25 level by October. Or GDX 26-26.5 if gold stocks stabilize and anticipate next upturn. Anyhow the outperformance of gdx vs Gold and Gold vs Spx will be erased by now.
What I’m suggesting as a possibly Alex, is that gold does exactly the same on the way up as it did on the way down, merely correcting back to the 77 degree line. If true, it means we move sideways into next week and then launch much higher again. The impulse move may not be over, with surprises continuing to be to the upside.
I agree with this possibility and MSA’s momentum work also alignd with this … although it may seem overly optimistic I still think this bull will keep as many off it as possible. We are not back in 2013-2018 anymore … massive corrections do not have to occur to gold/silver or the miners. This is what will continue to keep many on the sidelines.
The FED decision next week will rattle markets either up or down. We’ll have to see what happens. Although, either outcome I believe is positive for gold.
Alex33, IMO the only people bullish on gold are mostly gold bugs in the early stages of this move. There are plenty of times in history when an underlying asset didn’t need to correct for being overly bought. But I would like to see an orderly panic to higher prices 🙂 I could argue that this time it is different: debt, derivatives, FED lacks dry powder and a good starting point, NIRP, energy ROI, war(s) etc. But oh how I would love to see how they kick the can further down the road from here. Reminds me of how many ways there can possibly be to sell a razor or toothbrush.