Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Spectacular Rally Pending a Trigger

Commodities / Gold and Silver 2012 Mar 08, 2012 - 07:53 AM GMT

By: Hubert_Moolman

Commodities

Best Financial Markets Analysis ArticleGold just needs a trigger to launch it for the most spectacular rally since the late 70’s. I believe that trigger is likely to be the crash (or decline) of the stock markets.

This crash, if it occurs, is in anticipation of the inevitable bursting of the debt bubble. This is much like during the Great Depression when the stock markets crashed and bottomed before Total Debt as a % of GDP peaked in 1933. The Sovereign Debt-Crisis (especially in Europe) is the obvious sign that the debt bubble is bursting; with every additional unit of debt producing less or no increased GDP.


We do not have to only look that far, for an example of what is likely to come. Below, is a graphic that compares gold and the Dow, from June 2008 to May 2009.

The reason that I took these dates  is because the period is similar (based on fractal analysis) to the current period. Gold bottomed in October 2008, more than four months before the Dow made a bottom.  From the time of gold’s bottom, gold and Dow moved together at first, where after gold continued its rally, while the Dow was falling. It was also during this period that the gold stocks started a rally. However, this time, conditions are even better for gold stocks (more in the Gold Stocks Update).

Gold Long-Term

Currently, it is macro factors that are driving gold; therefore, once it starts moving up, it will often not make sense when compared to what other assets like stocks are doing. This is what greed and fear do: they make people to act irrationally. Fear and greed will push gold and silver higher at a phenomenal rate, despite major economic decline.

We, therefore, have to keep a close eye on the long-term charts, since the evidence for a massive rise should be there. I have done extensive analysis on gold and silver’s long term charts.

Update on bullish gold fractals:

Below, is an extract of my premium gold update (25 January 2012):

The fractals identified in the previous alert appear to be playing out as predicted. Below, is an updated version of the chart from that alert:

The two patterns are indicated by points 1 to 10, to show how they are similar. Point 10 appears to be in now. The next important barrier is the downtrend line.  Note that a short-term reaction, before piercing the line is possible.

Furthermore, should price pierce the line and rally, I would expect some kind of retest of the breakout area. Please note that these are just short-term movements, and it is anybody’s guess what will really happen. We have to focus on the big move, which is a significantly higher price over the coming months.

Gold/Silver Ratio

Below is a chart of the gold/silver ratio:

I have drawn a support line that was violated recently. This is a good signal for silver and gold price. We could see a quick move to 45, however, we are likely to see a retest of that 54 area, before that.

This could also mean that we could have a risk-aversion episode when we retest the breakdown level, with gold and the Dollar rallying. A retest will be a good opportunity to load up on silver, since price is likely to pullback.

At some point - after retesting the breakdown area (if it does) – this ratio is likely to fall very fast. That might be the point when silver and gold really start to take-off.

For more detailed analysis of gold, silver and the Dow, you are welcome to subscribe to my free or premium service.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2012 Copyright Hubert Moolman - 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.


© 2005-2022 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