Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Mega Bullish Technicals, Wow!

Commodities / Gold & Silver 2009 Oct 11, 2009 - 02:17 PM GMT

By: Adam_Brochert

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleIf you're not into technical analysis, you're not into it. I understand. Drawing squiggles on a chart seems like reading tea leaves to many. I get it. I personally believe that it increases your odds of success if you have the fundamentals right. In other words, technical analysis in isolation is not attractive to me, but laid over a solid foundation of fundamental analysis makes sense to me.


The Gold price chart, denominated in U.S. Dollars, makes sense to me. It is a thing of beauty. It is a Picasso for those who care to try their luck at reading price charts.

Here's a 2.5 year daily chart to show you what I mean:


The symmetry is perfect. The break-out is textbook. Can it fail to materialize and can Gold fall significantly from here? Yes. Investing/Speculating is never certain (I learned that when shorting the market last May and June). But those calling for a failure or steep correction here in the U.S. denominated Gold price are ignoring the dominant trend:



Gold has increased by 4-fold since the turn of the century. The mainstream sees Gold is going higher and is skeptical. Apparently it is a bubble according to some. Come on. You're telling me that an asset class that rises in value 4-fold over a decade is a bubble? Yeah, OK. We'll ignore the recent history of paper fiat-inspired bubbles and play pretend. Oh, wait. Let's look at an actual prior bubble that was unsustainable and ready to pop - the NASDAQ. Here's that historical 4-fold bubble waiting to pop in 1991:



Oh, yeah, and here's what happened next in the "unsustainable" tech bubble (20 year monthly NASDAQ chart from 1980-2000):


And how about oil? What does a paper fiat bubble in energy look like at the point when everyone is doubting it can happen? Here's oil on a weekly chart from 1999 to 2004:



And we all know what happened next with oil:


Those who think it is not possible for Gold to have a similar chart - I get it. No growth, no dividends, just a piece of metal, blah, blah, blah. But when the system breaks down due to too much debt and too many paper promises, the bubble swings the other way. Invest where you want. But me, I'll bet on Gold.

I'll bet that a shiny piece of metal will outperform the hubris of a small group of men and women willing to risk systemic failure to maintain profits. Call me cynical if you wish, but I believe a one or two ounces of a shiny metal will be equal in value to the entire Dow Jones Industrial Average before this bust is over. It happened in the 1930s and it happened in the 1970s, both during the context of secular bear markets in stocks like the one we are smack dab in the middle of right now. The last secular Gold bull market under our current U.S. fiat paper monetary system went up 25 fold from bottom to top. We've got a long way to go. In my opinion, the bubble in Gold has just begun.

Visit Adam Brochert’s blog: http://goldversuspaper.blogspot.com/

Adam Brochert
abrochert@yahoo.com
http://goldversuspaper.blogspot.com

BIO: Markets and cycles are my new hobby. I've seen the writing on the wall for the U.S. and the global economy and I am seeking financial salvation for myself (and anyone else who cares to listen) while Rome burns around us.

© 2009 Copyright Adam Brochert - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

John Mylant
15 Oct 09, 11:45
Gold Charts are right on!

Kudos, I am with you on the "dominant trend" phrase here. Gold is on the move and though we may have a correction, I beleive you have doe a very thorough study of these charts. There is not much to add but you are right and I am behind you! Good job!

John Mylant

http://mylantsmoneyblog.typepad.com/


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules