micahjmiller
Short

Gold Getting Ready to Disappoint Investors

COMEX:GC1!   Gold Futures
I can tell by the title I wrote that gold bugs are already pissed off.

Long story short, I think gold (and silver ) will go further down in value.

I first want to start by saying I love precious metals including gold , but I don't think this scenario is going to play out the way any sane person would think. That's why you have me, completely lacking all sanity. Lol.

Any decent gold bug would be laughing their asses off right now trying to understand how I could think gold could go even FURTHER down in value. All the central banks printing fiat money like mad men. The eminent stock and housing market crash. The ever dwindling trust of the people in their government. How could all of these add up to a lower gold price yet again?

If you want my fundamental reasons why, you can read my article on Steemit or AssetGuild.com...

On TradingView, we'll stick strictly to TA...

Let's get into the meat and potatoes.

To be clear, I am about 70/30 for a bearish continuation of gold and other precious metals in general.

The price of Gold reached an ATH in 2011 at about $1900. Since then, price as been beaten down to lows of $1050. Now we are in this range supported within a long term wedge that gets tighter as the weeks go on. There is only so much time before a big move comes.

The Bear Case:

In my opinion, gold entered bear market territory when price broke below the 100 and 200 MA. We saw a run down to $1050, then a run up to $1835. This was claimed to be the "new bull market" by many. Since then, price had played into this wedge pattern that we've been in for years now and is giving mixed signals with it's moving averages. Price is now testing the 200 MA after breaking through the 100 MA which leads me to believe there will likely be a rejection here. Why? because it's the opposite of what everyone wants.

Further more, breaking above the 200 MA signals the exiting of a bear market. And if we were truly in a bear market, we would need to fulfill one important category on my radar: The RSI .

We have yet to see an oversold condition in the monthly RSI . It happens for nearly every asset class in past bear market including for gold .

I have targets for $1,000 gold over the next few years and $735 gold in the most bearish situation.

The biggest thing to keep an eye on is this long term wedge pattern the gold price is in. We have consistently bounced within this wedge creating a coiling action in price. The end result is going to be a big move in one direction or the other. What most investors expect is a great performance by gold , but I can't help but think the opposite will happen.

In the long term, we are still in a corrective bear market. Meaning people bullish on gold will continue to be disappointed until they run out of capital. That's where the oversold condition on the RSI helps us out. Though, it might be many years before we see anything like that.

The Case for the Bulls

I am pretty certain the scenario I've described above is the most likely, but there is always the chance I end up being wrong. Any investor/trader is foolish to say they are always right.

So what do the bulls have going for them? Well that trend line supporting price in that great big wedge has held support for a longer time than gold has even been in this bear market. There is a chance that it is given greater respect.

From a technical standpoint, that is the only long-term signal to me that I could be wrong on this.
If you have any analysis on price, please share your link below. I am more than open to take a look.
I am not permanently biased. Just biased until I'm proven wrong.

Overall, I think a bull market in gold would be giving precious metals investors exactly what they want. Big money interests are still looking to accumulate the metal, and they would love nothing more than to accumulate it at a cheaper price.

From an economic standpoint, we are still tightening in the US. Meaning interest rates are going up and are becoming more attractive to investors, the US dollar is getting strong and inflation is DECREASING.

Gold does not historically consistently perform well during deflation, especially when it's no longer used as a global currency.

Strong Dollar = Weak Gold

Thanks for stopping by!

Your fundamentals are strong. Yes gold is still in a bear market from its all time high in 2011. Once the final wave C completes ($800 to $1000 price range), it will end the great gold bear market.
+1 Reply
@gvoommen, Thank you. I do know basic elliot wave analysis. Every bear market has it's A-B-C correction, I see the same thing as you. We have to have that final leg down.
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