Hi friends! Welcome to this update analysis on Gold, via the GC futures chart. Let's get to it! In this analysis, we're going to step back and take a multi-decade view of the gold market, to try to understand what's currently happening, and where we may be going.
As you can see, this weekly chart begins in 1975. So, we're looking at 44 years of data. Clearly, we can see that gold is currently in a long rising channel/wedge formation (in black.) On the upside, the top of this formation gives us a clear target of where we may be heading in the next few years — but before we get to that, I would like to draw your attention to the green trendline on the chart. You can see that there have been four distinct tests of this trendline. The first three tests (red circles) were in 1980, 2008, and 2009. Each of those first three tests were failures, defining that trendline as resistance. Then, in late 2009, gold broke above the trendline resistance, and we didn't test it again until late 2015 (green circle.) Since then gold has managed to stay above it. Furthermore, we can see that gold is making a series of higher highs and lows, as it gyrates inside of a smaller rising channel (in blue.)
So, gold was able to break above a 30 year resistance level and then turn around and define it as support! That is a massively bullish technical development. Based on that alone, I think there is a high likelihood that gold will test the top of the black channel/wedge formation in the next few years. That would put the price somewhere around the $2500 level.
Looking at the volume, we can see that it has been rising for decades, just as the price has overall. This could be attributed to population growth and growing market participation, but the current trend is higher, and I don't see gold deviating from that long term trend anytime soon. With that said, I do think there is a chance that the stock market could be entering a re-energized multi year bull run, despite the "recession" commotion that everyone is talking about in financial media. While I do think that there could eventually be a debt crisis, there is no real evidence in terms of equity performance, that the end is near. So, if equities perform well for the next few years, price could continue to gyrate inside of that small rising blue channel. The indicator that I'm looking at, as a sign that gold is entering a new bull market, is how well it holds the weekly EMA ribbon.
As you can see, in prior bull markets, gold held the EMA ribbon on nearly every test. So, the weekly EMA ribbon is a fantastic pulse monitor for a gold bull market. I'm watching now to see if gold will hold the weekly EMA ribbon here. If not, I don't think the gold bull market is getting started just yet. If it does hold the weekly EMA ribbon, I will be looking for a breakout above the top of the blue channel. If that happens, I expect prices to soar above 2000.
#PoopLovesYou
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment
⋅
Don't forget my EPIC 2018 call for an explosion in gold prices!
Poop, do silver also. Should have higher returns in physical and Jr. Silver miners. :)
Fida4u
⋅
@MagicPoopCannon not one time in this 44yr span has there been negative nominal and real rates, were in uncharted territories.
MagicPoopCannon
⋅
@Fida4u, Indeed. Although, rates aren't negative yet. I do suspect they will be at some point though. If we ever see a breakout above the top of the black formation, people better buckle up. =D
schima
⋅
Great analysis as always. Keep up the good work and thank you for sharing. I don't believe a recession is near in the stock market for the next one or two years. Strangely gold is in a bull market.i don't understand it as gold always was a safe haven for investors in times of trouble in the stock market.
MatTheCat
⋅
How can anyone take Volume metrics seriously over such a time frame? I would dare say that volume has risen in line with the spread of high frequency trading bots......when did the Comex start doing gold futures contracts anyways? Early 2000s?
apophis51
⋅
we are entering the 'golden' age ;D
Confucius_The_Great
⋅
@apophis51, digital gold. Physical gold should be named “governments gold” because they Will take once again when shit hits the fan as always.
paymeinequity
⋅
We’ll be watching that weekly EMA with you.
Thanks for this!!!