Loading ...Gold/Silver/HUI Analysis – So Much More To Come
In a bull market, price action extends to the right (in terms of cycle low to cycle top) allowing more time for price to rise. So-called ‘right-translated’ cycles leave shorter periods of time for price to pullback before the next ascent begins. I’ve tried to show that in the following chart…
Apart from the upcoming 8 year cycle low, this process of higher highs and higher lows should continue for many years to come. Look back at the 2008 cyclical low for an idea of what I mean.
It’s so important to keep your eyes on the prize, and not get completely shaken out of your positions during a PM bull market. With that in mind, let’s take a look at where we currently stand in the grand scheme of things with gold…
What we can conclude from this is that the current move is pretty normal, but that a fairly shallow (in terms of the big picture) pullback/consolidation is likely to come, and may well last a year or so (perhaps a few months trending down, then a few months trending back up, before breaking out again). OK, great, so what about Silver, which has been explosive lately…
The numbers and percentages quoted are approximate, and just calculated roughly using the line chart. We can see that the angle of ascent has been very steep, but in terms of time we may have a little further to go. I see a number of scenarios, all of which resolve bullishly. We can either progress to around $35 then pullback before the move to $50, or we pullback here and then make that move. I do expect a sizeable correction into the 8 year low though, and a drop from $50 to either $35 or $28 would fit the bill. After that it’s on towards some number I haven’t yet started to work out properly.
SIL & SILJ will clearly catapult upwards as all of this unfolds, but their charts don’t go back far enough. I’ve taken a close look at HUI though, and you can expect larger percentage gains for the silver miners as the gold/silver ratio continues to unwind. Here’s the chart…
The cup formation would allow a short pullback to around $300, but a doubling to $600 is what I’m looking for in the next 12-18 months. In terms of time, that would position us with perfection to build out a handle into the 8 year low. After that we switch on the afterburners and break away from the gravity surrounding the cup…
Simply Excellent clear concise analysis NS
Thanks as always
Appreciated FGC, thanks 😉
That should be a chapter in your future book.
Maybe a collaboration after all this is over and we’re on a Caribbean Island sipping a mojito 😉
YEAHHHHH… I’m in! Do we need masks on an island if it’s just us?
No damn masks allowed – just a nice big bottle of Rum, lol.
Good plan, guys. We’ve done extensive research on Mojitos in the Caribbean…
The best Mojitos of ANY Islands are in Cuba; they use actual Cane sugar.
Are Americains allowed to go to Cuba now? I remember going on vacation to cayo largo… just beautifull small island on south of Cuba main island.
Yes, and we went as soon as the window opened in 2012, a few years before American tourists descended en masse. A lot has changed since then…. but I don’t think the Mojitos have.
What I hear/see you saying is your master plan is unfolding as it should. Further useful roadmap directions – many thanks!!
So far, so good SB. I’m sticking with the plan, but the charts will be our guide as ever (i’ll be there trying to shine a light on them :-))