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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

7 Year Cycles Can Be Powerful And Gold Just Started One

Commodities / Gold & Silver 2019 Dec 05, 2019 - 10:04 AM GMT

By: Chris_Vermeulen

Commodities

Our research and predictive modeling systems have nailed Gold over the past 15+ months.  We expected Gold to rally above $1750 before the end of this year, but the global trade wars and news cycles stalled the rally in Gold over the past 2 months.  Now, it appears Gold is poised for another rally pushing much higher.

But wait, if you’re thinking I’m just another one of those traders who is always bullish on gold, just know I have been telling the truth about where gold was headed (lower) for years, but finally, the tide has changed!

Gold broke down from a bull market in 2012/2013 – nearly 7 years ago.  Now, Gold has broken resistance near $1375 and is technically in a full-fledged Bull Market.  The importance of this is the 7-year cycle and how the rotation in Gold, between the high near $1923 and the low near $1045 represent an $878 price range.  The upside (expansion) rally in Gold may very well move in expanding Fibonacci price structures – just like it did in 2005 through 2012.  If this is the case, then we may expect to see an ultimate peak price in Gold well above $3500.


The rally that started in the last 2015 and ended in July 2016 totaled +$331.1 (+31.67%).  The next price rally that started in August 2018 and ended in September 2019 totaled +$399.4 (+34.22%).  If we take the current rally range (399.4) and divide it by the previous rally range (331.1), we end up with an expansion range of 121%.  The two unique rallies that happened just before the 2009 parabolic rally in Gold represented (+315.8: 2006) and (394.8: 2008).  The ratio of these two rallies is 125%.  Could Gold have already set up for another parabolic rally well beyond the $1923 target level?

Before finding out what is next quickly join our free trend signals email list.

Monthly Price Of Gold Chart – Bull and Bear Market Trends

Our research team believes Gold has already entered a technically valid Bullish Market trend.  We believe Gold miners will follow higher as Gold begins this next move higher.  The reason we have not engaged in Miners, yet, is because we have not received any technically valid signals related to the Gold miners indicating they have also entered a new Bullish Market trend.

Gold is the safe-haven for the global market.  It is a store of value and offers price appreciation when the global market risks are excessive.  Because of this, the sentiment across the global markets appears to be weakening in regards to forward expectations and valuation appreciation within the investment/asset classes.  If Gold continues to rally higher, consider it a strong indicator that the foundation of the global market valuation levels is weakening considerably.

US Dollar Will Start To Support Higher Gold Prices

Should the US Dollar retrace lower, Gold will see a price increase based on the renewed weakness of the US Dollar.  This would also assist in re-balancing global trade and economic issues with the US Dollar moving moderately lower as weakening global markets contract.

Gold Mining Stocks – Monthly Chart

Miners are set up much like Gold was in early 2018.  Resistance has been set up with multiple price tops and any momentum rally above this level would technically qualify as a new Bullish Market trend for miners. 

At this point, we believe the bottom in miners has already formed and we are simply waiting for the qualifying technical confirmation of the bullish trend to begin.  Jumping into this trade too early could result in unwanted risks as the price could still waffle around within the Stage 1 Base range.

If you want to learn more about market stage analysis I will be covering it a new article shortly. Once you grasp the basic concept you will see these stages on every chart no matter the time frame and know when to focus on trading and when to ignore the charts.

If you like new fresh big trend trades then check out this real estate article I just posted and how the real estate ETF could allow your to profit from home prices but you don’t even need to own or buy a home!

Concluding Thoughts:

The recent weakness in the US and global markets has prompted a moderately solid upside move in Gold and Silver over the past few days.  We still need to see a Gold move above recent resistance to qualify as a new upside rally though.  Miners are set up for a breakout technical move which we must also wait for.  We believe these two may move somewhat in unison if the global markets continue to contract throughout the end of 2019 and into 2020.

Stay tuned for more updates and alerts when all these key sectors and asset classes start new trends because that is when you want to get involved for immediate oversized gains. See my stock, index, and commodity trade alerts here.

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

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