The future is often vague\/uncertain (in fact, it usually is, especially the further ahead you try to look). My outlook for gold is steadily evolving around some fixed (cyclical) points.
\nThere are a range of likely outcomes which I’ve allowed for in my chart below. The orange shaded area highlights the region I expect gold price to occupy. I’m not catering for what in my view, is a very low probability collapse in gold prices. Unless support levels are breached, there’s no need to spend too much time thinking about that. So, what do we have ?<\/p>\n
Firstly, we can see how we expect the various long term indicators to behave. I’ve highlighted the Stocharstic indicator here. There are 3 clear stages visible: Stage 1 – Rise from below 20, to above 60, Stage 2 – Stay above 60 (with the exception of a likely mid cycle breakdown in 2024), Stage 3 – Fall back below 60 and eventually below 20.<\/p>\n
Next, we can see how these 3 stages tie in with golds cyclical behaviour, and I’ve labelled the chart below with the cyclical lows every 8 years. The unknown bit is whether the cycle is going to turn out to be left, or right translated. In a bull market, the cycles should be biased to the upside, which requires right translated cycles (large portion of the cycle trending upwards, with a short correction at the end of the cycle (like 2008).<\/p>\n
By my reckoning, as we move towards $1800, and the top of my red rectangle, we should be transitioning from stage 1 on the Stocharstic indicator to stage 2. This will sustain a strong uptrend for the next 2 or 3 years. I’ll be getting very, very cautious in 2022 and probably closing out all of my positions in the PM sector. It’s interesting to see that the top of my red triangle (approx. $1800) intersects the line drawn using the ‘arc’ tool in the charting software in the year 2024 !! Coincidence ? It would make perfect sense to have a hard backtest of the $1800 breakout area, before the final stage of the PM bull takes off and leads us into a parabolic top in the late 2020’s. I will be back in to mining positions for that of course \ud83d\ude42<\/p>\n
The future is often vague\/uncertain (in fact, it usually is, especially the further ahead you try to look). My outlook for gold is steadily evolving around some fixed (cyclical) points. There are a range of likely outcomes which I’ve allowed … Continue reading ![\"\"](\"https:\/\/goldtadise.com\/wp-content\/uploads\/2019\/08\/Chart1312Gold.png\")
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