gold, page-582

Just some thoughts I’ve had recently regarding the sustainability of the current run and the potential for further gains this year.

Further Gains
Over the last 15 years the max gains per annum have touched the 30% mark, but mostly hovered around the low 20%’s. This positive streak happened from 2001 to 2012 until, we hit 2013 to 2015 which were loss years.

As we have just come from a 3 year correction period (1 year being 28% down) I believe the current gains of 15.9% could potentially revisit the 20-25% gains range we saw from 2001-2012. The fact that we have just come out of this 3 year loss period might suggest that the swing back may be rather powerful and that touching 30% gains may be very realistic.



Sustainability

Clearly, we have broken the downward trend which has reigned for the last 3 years. Not only did we break it, we knocked it the f@#$ out! It’s down, and its been down since late Jan.
This is a stand out fact to me because prior tests of the upper trend line would revert back to the downward trend within several days, causing a sharp peak with little sustainability.

As it stands, we have been consolidating sideways for about 2 months now, above the old upper trend. Considering we are in the March to July period in which Gold performs the worst, the consolidation we are currently seeing has been an unexpected pleasure.

So why have we not had a correction during the beginning of what has historically been the worst time to hold gold throughout the year? Well, currently the macro environment looks pretty good for gold, which I believe is the reason we are consolidating, and not correcting (for now).

Positive macro facts:
Failing monetary policy – check
Strong chart formations - check
Silver finally showing up to the party - check
Gold stocks performing/holding strongly - check
Manipulation confirmed in the main stream – check





Going Forward

So, should the abovementioned positive macro factors keep the gold price in consolidation/slight correction throughout the March – July period, I believe we are in a fantastic position to build on the current annual gold returns of 15.9%.

If we can consolidate in the $1,200-$1,280 range until the end of July, this will then put us in a position to achieve the other 14.1% gains needed to reach the “upper threshold” when it comes to positive years; that is the 30% gains area.

So from an opening January price of $1,070, if you add 30% then you reach $1,391.
If we make it to the end of July holding the current level of about $1,240, all we need to do is go up another 12% to get to the $1,380 range.

All very realistic imo.
Thanks for your time and would appreciate your feedback (unless you are Skol).