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
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Breaking Below This Point Could Be Fatal

Commodities / Gold and Silver 2018 Jul 12, 2018 - 12:50 PM GMT

By: Harry_Dent

Commodities Shortly after gold fell to $1,046 in December 2015, I called for a bear market rally that ranged from $1,375 to $1,428.

That low mark of $1,375 has been tested three times since without being able to break above.

That’s not a good sign…

Gold has been steadily down since the third test on April 11th.


I first warned our Boom & Bust subscribers on June 4th that a break below the late 2016 rising trendline would likely trigger a further fall.

Then again on June 15th as the break was occurring, saying that it “may be the last chance to sell gold for any kind of decent profits.”



Gold went straight down from there.

After giving a sell signal at around $1,290, it has now tested a second bottom trendline that extends back a year earlier from the major low of $1,046 on December 11, 2015. Yesterday’s low should be the final support, which will be a “make or break” point for gold.

If it cannot hold here…

If it breaks significantly below Monday’s low of $1,240…

Then the next real support is back at that $1,046 to $1,050 range.

After that, it’ll drop to the lows seen in late 2008 around $700.

Silver is at a similar critical level. It was just under $16 on Monday, and has been tested several times since late 2015.

Gold is oversold short-term, and is bouncing a bit this (Tuesday) morning, as expected.

This bounce could easily go back to $1,270 or so.

But a clear break of this rising bottom trendline ahead would be the last stand for gold.

Mark Hulbert, a financial analyst, measures long-term sentiment in many indices. He doesn’t see gold at levels that invite a major bottom and rally ahead. His sentiment indicator for gold is at -13% on Monday against -30%, which is more ideal for major bottoms.

He says gold bugs are only moderately bearish, but that’s not bearish enough.

The dollar has also been rallying from its lows of 88, and is trying to break above the resistance at 95.

A break like that would be further bearish for gold. Gold trades in dollars and a rising dollar means falling gold prices. The rise in short- and long-term interest rates prompted by the Fed don’t agree with gold either since it yields no interest to compete.

And that looks to continue for many months ahead.

Now, if gold were to mount a strong rally and break above $1,375, then that could actually be a bullish move that projects it towards $1,650 or so.

This is what bitcoin is doing after testing the critical $5,800 to $6,000 levels that I recently warned about.

But, again, that doesn’t look likely.

So, how much do you love your gold?

Hopefully not enough to be like the gold bugs. They’ve so much emotional and ideological attachment…

Despite heroic attempts to stimulate growth and inflation, we’re in a deflationary era until at least 2020, and likely into 2023…

This isn’t favorable for gold since it hasn’t fully deflated from its bubble that peaked in September 2011.

Gold’s bubble deflation requires the minimum of a $700 low – the level seen in the 2008 crash.

It’s bubble action (bubble origin) started in 2005 at $450. That would be the ultimate deflation and low for this bubble.

If that happens, then load up the truck and get ready for the next long commodity and inflation cycle. One where gold could see something like the $5,000 that gold bugs are forecasting – it’s just that they will be dead by then!

If you make the rational decision and sell on the break, you can buy back if it does happen to break convincingly above $1,375 without missing too much.

But again, that’s the unlikely scenario of chance here with greater downside than upside near term…

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2018 Harry Dent- 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.

Harry Dent 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