The chart below is a long-term monthly chart. Monthly charts cut out a lot of ‘noise’ and give you a good sense of long-term trends.
With that in mind, the chart below, my friends, is very bullish indeed. It’s a clear breakout from an extended consolidation period. And while the price looks ‘overbought’ in the short-term, I think you’ll see dips bought enthusiastically in the months ahead.
There simply isn’t any evidence that we’re near a major top. This move in the gold price (and Aussie dollar gold hitting $3,550 an ounce last week) is receiving barely any media attention.
I’m not getting many requests to recommend more gold stocks. And friends and relatives certainly aren’t calling me to ask about what’s going on with gold.
Remember what I wrote back in December when positioning for this potential breakout.
‘The next chart gives you a potential scenario for how this might play out. That is, the pressure builds for gold in the coming months. It then breaks out meaningfully and quickly rallies to over $2,200. You’ll see a pull-back towards the breakout area. That’s when the buyers will come back in.
‘From there, gold will rally again to around $2,500. It will be front-page news. And the smart money will start to take profits.’
As it happened, gold got to exactly US$2,200 an ounce, but it barely corrected before surging higher.
Whether it gets to US$2,500 or not I have no idea. But the point is that when it hits the headlines and ‘everyone’ wants in on gold, you know it will be time to take profits.
We’re not there yet…
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I am actually more bullish now because I think this is the beginning of a multi-year bull market. And the bull this time around could be even faster because we have China actively buying progressively (17 months and counting) , something is up, that China is loading up on Gold. Sure, we should expect periodic corrections but they are likely to be shallow. We could get to $3,000 by the end of 2024 or Q1 2025 provided we have a Fed rate cut by June24 and no recession. If we get recession, Gold could correct first in tandem with equities and then resume moving higher, as we would expect the Fed to end QT and introduce QE.
So I am not selling Gold, Gold ETFs and the few smaller cap gold developers (AUC, AWJ, KSN, DTM) and EMR, its Buy and Hold from here until the point where it becomes appropriate to pivot positioning.
,,I do see a 50% chance we are on course for a similar rally like the one from 2001
The $Gold bull ends when we hit this upper rail. Where and when is very much TBD, but I favor this symmetric possibility. https://x.com/DowGoldEquals1/status/1777463030785225093
