Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

It’s Not Yet Time for Gold

Commodities / Gold and Silver 2018 Mar 31, 2018 - 09:20 AM GMT

By: Jordan_Roy_Byrne

Commodities

Last week we noted that Gold’s quarterly close would be a key marker for Gold’s immediate breakout potential. Gold was seemingly on course for its highest quarterly close since 2012 until it reversed back below quarterly resistance at $1330/oz. Hence, an imminent break to the upside is unlikely and gold watchers will have to remain patient. It’s not yet Gold’s time. It will be soon enough.

One catalyst for the most recent strength in Gold (the correction in equities) appears to have faded as the S&P 500 has held its 200-day moving average. A sustained rebound in equities while bond yields correct would not be particularly bullish for Gold. The obvious reason is capital is flowing into equities and not Gold. A rebound in equities amid a temporary reduction in inflation expectations would equate to stable or rising real yields.


Essentially, there are two ways Gold can break to the upside. The first is Gold senses a breakout in long-term bond yields and a sustained rise in inflation expectations. Those developments would soon negatively impact the economy and stock market which would lead to easier Fed policy and ultimately falling real yields.

The other scenario is bond yields do not break to the upside, there is a slowdown, the stock market declines and the Fed has to reverse course all together. As we predicted in past editorials, long-term yields are trending lower and that could continue. In the meantime, Gold will not break to the upside unless the stock market experiences more turmoil.

In addition to the current macro-market backdrop, history suggests that it may be too early for Gold and gold stocks to begin another bull move. In November we discussed how the gold stocks were following the pattern that other markets followed after a “mega-bear market” (which we define as multi-year and +80% in price).

Take a look at those examples and note the time between the end of the bear market and the next significant low (from which the bull resumed). In most cases the time between those lows is two years and seven to nine months. For the gold stocks it has only been two years and two months since that epic January 2016 low.

Assuming stocks rebound and long-term bond yields continue to moderate, then Gold is unlikely to breakout this spring. However, that is perfectly okay as our historical study suggests the miners (while facing little downside) may not begin a real bull move for several months. Gold Investors should not be discouraged as they could panic at the absolute worst time (I’m already seeing it anecdotally). Regardless of whether the bull move begins in a few months, five months or whenever, we continue to remain patient while accumulating the juniors we think have 500% return potential over the next 18-24 months.

To follow our guidance and learn our favorite juniors for 2018, consider learning more about our premium service.

Good Luck!

Email: Jordan@TheDailyGold.com
Service Link: http://thedailygold.com/premium

Bio: Jordan Roy-Byrne, CMT  is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2014 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor.  Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.

Jordan Roy-Byrne Archive

© 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