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
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

If You Own Gold, Look Out Below

Commodities / Gold & Silver 2020 Jul 25, 2020 - 04:41 PM GMT

By: Avi_Gilburt

Commodities

It has been quite some time since I have published an article on gold. Unfortunately, we have become so busy at Elliottwavetrader that I simply have not had the time to publish many public articles.

So, as we are approaching an inflection point, I thought it would be an appropriate time to publish a public article.

Now, I have to be honest. I am quite disappointed at what I am reading publicly about gold. Many are still trying to sell you on the fact that gold is a hedge against market volatility. They suggest that you need to own gold to protect your portfolio when the stock market tanks. Well, in many past articles, I have outlined that history simply does not support this perspective.


There have been many periods of time wherein gold has rallied alongside the market, such as 2002-2007, and there have been times when gold has tanked alongside the market, such as in 2008. In fact, with 2008 being the most deflationary period of time we have experienced since the Great Depression, how much protection did gold provide to you during the time you most needed it?

Just look at how it has been mirroring the action seen in the stock market for 2020 if you are not yet convinced about the fallacy noted above.

Now, I am not claiming that gold will or will not “protect” you during times of volatility. I am simply saying it is not as simple as so many claim it to be. Rather, those claims are completely intellectually dishonest and are not factually or historically accurate. Most often, those claims are intended to sell you something based upon fear. And, I personally think that praying upon investor’s fear in such a manner is quite despicable.

Instead, you should be analyzing gold on its own to know when it is the appropriate time to buy and sell the yellow metal. That is what we have done for years and have done quite well.

For those of you that do not know our history on metals analysis, allow me to present you with a quick summary.

When we look back at 2011, and we read the articles being published back then and remember back to that time frame, it stands out quite clearly how wildly bullish 99% of the market was at the time. One would have to search long and hard to find an analyst who did not believe that it was a certainty that gold would eclipse the $2,000 mark as the market was rallying parabolically during the summer of 2011.

Yet, in August of 2011, I penned the following warning:

“Again, since we are most probably in the final stages of this parabolic fifth wave “blow-off-top,” I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.”

And, as we now know, gold topped within $6 of my target and when we broke below the 148/150 support in GLD, we confirmed that we entered into a multi-year correction.

Then on December 30th, 2015, I posted this public suggestion for those willing to listen:

“As we move into 2016, I believe there is a greater than 80% probability that we finally see a long term bottom formed in the metals and miners and the long term bull market resumes. Those that followed our advice in 2011, and moved out of this market for the correction we expected, are now moving back into this market as we approach the long term bottom. In 2011, before gold even topped, we set our ideal target for this correction in the $700-$1,000 region in gold. We are now reaching our ideal target region, and the pattern we have developed over the last 4 years is just about complete. . . For those interested in my advice, I would highly suggest you start moving back into this market with your long term money . . .”

In fact, when gold was striking its final bottom in December of 2015, I was on the phone buying gold from Doug Eberhardt of Buygoldandsilversafely.com. Since that time, Doug has often noted how accurate we have been with our buys on metals:

“I can attest to your accuracy on actually buying both gold and silver from us as close to the bottom as one could. With gold you called it to the letter and your limit order which was placed well in advance executed perfectly. The silver limit orders were within a tight range of the lows as well . . . Your timing on buying the dips is uncanny Avi! People should be aware of this.” - - - Doug Eberhardt – SA Contributor - buygoldandsilversafely.com

Moreover, when silver broke the 12 level back in March of 2020, I got on the phone again with Doug, and bought more silver. I even posted to my members that I was getting on the phone with Doug and putting in an order to buy as we were approaching that 12 level, and many members followed my lead.

Doug later came into our chat room at Elliottwavetrader, and posted the following about our work as well:

“Avi has the magic touch. Listen to him . . . And I want to explain to you all what Avi did for you. He got most of you to buy the metals before the premiums shot up and before everyone ran out of product. This is the 2nd time he has done this and kudos to him for doing that for you.”

For those following my work over the last year on GLD, I was strongly urging you to buy gold around Thanksgiving time of 2019. At the time, GLD was around 136. Then in February of 2020, when GLD was around 160, I was expecting a pullback, for which I was primarily targeting the 149 region. But, clearly, GLD broke that support and dropped to our next lower support region of 136 again. Yet, the structure was corrective in nature, which kept me bullish of gold in the longer term, as I outlined to the members of ElliottWaveTrader.

At this point in time, we are approaching the 170-175 GLD target I outlined last year as my main target for 2020. And, now, as we are approaching that target region we set last year, I am expecting a pullback.

Initial support for this pullback is in the 161-65 GLD region, with further support below that in the 141-148 region. The manner in which the market pulls back in the coming weeks will give us greater clarity regarding the depth of the impending pullback that I expect. Once we see a sustained break of 167/168 GLD, then the pullback is likely in progress.

Moreover, depending upon the depth of the impending pullback, the next minimum upside target I have is the 188-197 region in the GLD. Once the next upside structure develops, then we can hone in on the more likely target within that region.

The only thing that would invalidate the potential for the next higher target region is a break down below 141, which would suggest that we will break below the low struck in late 2015. For now, that is clearly not my expectation. But, as we are now approaching an important inflection point for gold, I thought it was an appropriate time for me to present a warning to those that follow my analysis in order for you to be able to protect your positions, if you choose to do so.#

See charts illustrating the wave counts on the GLD.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

© 2020 Copyright Avi Gilburt - 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