Posted on 05/27/2021 4:22:47 AM PDT by blam
As we know, history tends to rhyme. It’s never the same, but when you zoom out, the bigger picture often looks very similar. What does it mean for gold?
Short-term implications
With gold’s back-and-forth price action mirroring its behavior from 2012, the yellow metal is likely destined for devaluation.
Back then, gold zigzagged with anxiety before suffering a material drawdown. In fact, in early October 2012, it moved slightly above the initial highs right before sliding.
Moreover, while the yellow metal has bounced above its declining resistance line (the black line below), the price action mirrors gold’s behavior from early January. If you analyze the blue line below, you can see that investors’ optimism regarding gold’s short-term breakout quickly faded and the yellow metal sunk like a stone. In addition, with gold’s RSI (Relative Strength Index) moving slightly above 70 before the January swoon occurred, an identical development is already playing out in real time.
Gold seems to be insisting on repeating – to some extent – its 2012 performance, and – to some extent – its 2008 performance. Either way, it seems that gold is about to slide.
The reversal in gold took place after gold moved very close to its mid-January highs and the 50% Fibonacci retracement based on the August 2020 – March 2021 decline.
The sizes of the current rally (taking the second March bottom as the starting point) and the rally that ended at the beginning of this year are practically identical at the moment.
Just as the rallies from early 2012 and late 2012 (marked with blue) were almost identical, the same could happen now.
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(Excerpt) Read more at marketoracle.co.uk ...
Inflation is coming, Silver and Gold (PHYSICAL METAL COINS BARS ETC.) are the cheapest they will ever be.
As a hedge against inflation buying bitcoin isn’t a good idea. But Gold and Silver are actually worth something.
I see a run-up in gold prices followed by a correction to 1680 and a test of the low then the upward trend resumes.
gold moves in the opposite direction of inflation adjusted bond yields.
Inflation almost doubled to about 4.2% in the last inflation report. That drove down real bond yields. Expectations are that next inflation reports will show even more inflation.
The fed has no plans to raise interest rates. They want inflation so as to lower the value of the dollars needed to pay off the massive debts.
That’s only half of the forces pushing gold higher. The other is structural. Basil 3 is forcing commercial banks to get rid of their paper gold contracts that are not backed by gold. There’s about 100 times more value in the paper contracts than in the actual gold supply. This has created a synthetic supply that is simply not there. Banks will have to close out their shorts. That’s the same as buying. So there is huge demand coming into the gold market that is structural in nature.
Gold is going to 5-10k over the next five years or so.
5-10k an oz?
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