Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold on Track to Reach $1860 - $1920 by Mid 2011

Commodities / Gold and Silver 2011 Apr 29, 2011 - 02:39 PM GMT

By: GoldRunner

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleThe Golden Parabola is continuing to follow the cycle of the 70’s Gold Bull as the U.S. Dollar is further devalued against Gold to balance the budget of the United States at this point in the “paper currency cycle” where Global Competitive Currency Devaluations rule. As discussed in a recent editorial this point in the cycle suggests that Gold will soon enter into a more aggressive higher rise in price as it starts to project the higher Vth Wave characteristics of this new Golden Parabola.  


Much of the debt that must be devalued by the U.S. government has not yet been moved to the balance sheet of the U.S. Government. As such, from a fundamental standpoint, we won’t know the true height that Gold will achieve until that has been accomplished although we can gauge the progress of today’s Gold Bull off of the 70’s Gold Bull to a large extent.

Price Inflation and the Price of Gold

We saw price inflation, in general, track Gold in the late 70’s, although much of the rise in general price inflation tends to lag the rise in the price of Gold because Gold’s rise is directly related to the rise in Dollar Inflation that eventually creates general price inflation.  General price inflation lags the rise in the price of Gold since it takes time for Dollar Inflation to work its way through the pricing environment of the various markets.  Thus, not only are Gold and Silver great hedges against price inflation, but owning Gold and Silver is a great way to pre-empt the ravages of price inflation that are headed our way over the coming years at this point in the paper currency cycle.

THE GOLD CHARTS

Chart #1 Suggests a Potential Price of $1860 for Gold into Mid-year

The first Gold Chart is one I created for the original Golden Parabola editorial that showed my expectations at the time for Gold to bottom at the 34 week EMA with a potential target for Gold into mid-year per the 1970’s Gold Bull up to around the $1860 level.  On the chart, below, I have now added a blue line off of the tops since the 2008 Deflation Scare low showing a potential for Gold into mid-year to around the $1860 price level, which appears to confirm the earlier chart.  The chart also shows that Gold has busted out to new historic highs with no horizontal resistance above and with no real angled resistance on the chart until much higher price levels are reached. 

Frankly, I expect the price of Gold to rise fairly rapidly up to the $1620 to $1640 area on the chart before going up to at least $1860 by mid-year.  The TA indicators which simply monitor the health of price movements are all a “go.”

Chart #2 Suggests Potential $1920+ Gold Into Mid-year

The second chart shows Gold rising up through the same angled dotted line that it rose through back in 2006 on its way to the upper black solid line of the channel top which will be around the $1920 level into mid-year.  This chart also includes a black dotted line above the channel line that mimics the extent that Gold overshot the channel on the down side into the Deflation Scare Bottom into late 2008.  Since the necessary Dollar Inflation to deal with the larger current level of debt is so much larger today versus the late 70’s, is it possible that Gold will overshoot the upper log channel on the upside to the extent it overshot the channel bottom on the downside?  If so, then a higher target for Gold might come into play.

Chart #3 Suggests Vth Wave For Gold Unfolding

The third Gold chart shows a distinct channel for each “Phase” or Elliott Wave rise in this current Golden Parabola.  We can see that Wave I was basically held in the smaller flat blue channel into late 2005.  After Gold broke out of that blue channel it moved into a higher sloped rise into the green channel that approximates Wave III in the current Golden Parabola.  We can see on the chart that Gold has now busted up through the top of the Green Channel firmly into the Red Channel which appears to approximate the higher sloped Wave V advance. 

I had suggested some weeks ago to the subscribers to my service (see here for details) that a rise above the black dotted line on this arithmetic chart might herald in a very sharp rise in price into mid-year, and that appears to be in motion.   We can see a similar bust out of the Wave I Channel into the Green Wave III Channel back in late 2005.  That move in late 2005, up and out of the Wave I blue channel, was basically “phase transition” into Wave III if you want to use that term.  Similarly, the current bust out of the Green Wave III Channel into the Red Wave V Channel appears to be the phase transition to Wave V in progress - a transition to a true higher priced slope of rise for the Golden Parabola. 

Chart #4 Suggests Gold Likely to Rise Into Armstrong’s June 13th Turn Date

The final chart for Gold is “Fractal Gold Vs Armstrong’s Economic Confidence Model.”  I have placed a dotted red line to the right of the sold red vertical line in the coming period to denote the actual June 13th turn date that Mr. Armstrong has proposed.  We can see that the Gold price is running hard and higher toward his turn date as it did into the last 2 similar turn dates represented by the solid red lines on the left hand side of the chart.  We can see that the TA Indicators which are simply tools to measure the health of the rise of Gold suggest that higher Gold pricing into the June 13th turn date appears probable. 

CONCLUSION: Current Golden Parabola on Track

The current Golden Parabola has been tracking the Golden Parabola of the 1970’s almost perfectly for over a decade.  Today’s Golden Parabola is driven by the parabolic growth of the U.S. Dollar Inflation in response to the massive backdrop of debt that exists, today.  We can project price targets as the Golden Parabola grows, but its final height will be determined by the necessary price level for Gold to balance the U.S. budget once all of the liabilities of the U.S. are eventually placed on its balance sheet.  Many of those liabilities will not be transferred to the U.S. balance sheet until late in the Golden Parabola’s rise in an attempt to compress the level of discomfort in terms of time that the Dollar Devaluation will create.  Thus, it appears that at this time the terms “Bubble” and “Gold” do not belong in the same sentence. 

If you take a look at the chart for Silver you will start to get an inkling of what is to come for the Gold price.  It appears that we are just entering the higher sloped rise in Gold that has already begun in Silver; and Silver still has a much higher path to climb into the future.  There is no doubt that Gold has made a nice run since the original Golden Parabola article, but I expect the run to continue into mid-year.

PM Stocks

As a quick note on the PM Stock Indices, this analogous break-out of Gold ushered in higher valuations for the large cap PM stocks in the late 70’s.  The PM stocks tend to be re-valued higher in short dynamic spurts, and I am looking for one of those spurts higher for the PM Stock Sector to commence with this break-out in Gold.  I hope to return with an article on the PM Stock Indices in a few days. 

Thank you for taking the time to read this article.

    GOLDRUNNER

    Goldrunner is a frequent contributor to www.FinancialArticleSummariesToday.com  and www.munKNEE.com  and you can receive information about our new subscription website once it is active by dropping us a note at Goldrunner44@aol.com. You are also encouraged to sign up for munKNEE’s  FREE weekly “Top 100 Stock Market, Asset Ratio & Economic Indicators in Review” which will begin early in 2011.

    Disclaimer: Please understand that the above is just the opinion of a small fish in a large sea.  None of the above is intended as investment advice, but merely an opinion of the potential of what might be.  Simply put:

    The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.


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


Post Comment

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

6 Critical Money Making Rules