Gold From 'On The Go' To Narrow

To wit, in the following two-panel graphic we've the EDTRs for the Swiss Franc on the left and for Gold on the right. The time frame is from one year ago-to-date. Note of late how the Franc's EDTR has increased from .006 points-per-day to .008 points ... but that for Gold has narrowed toward the bottom of its panel at 24 points-per-day. (And again, this is not market direction, rather it's each day's anticipated distance between the high and low):

The point is: Gold for this "instant" (if you will) is not in play. Of course, we view such "nap time" as a temporary malaise, or perhaps better stated, as a consolidative phase. Indeed per last week's missive, we expect Gold to now be on the rise, even with 1800 as a reasonably near-term prize.

Moreover, we're maintaining 2401 as our year's forecast high. That target is 39% above Gold's present 1732 level with some nine months left in 2021. But can Gold actually spring up that much so quickly? Historically it has done so on better than a dozen mutually-exclusive nine-month (or less) occasions in the last 15 years alone. So nothing new there. 

Helpful to Gold's cause shall be an S&P 500 crash on the order of -50%, (the case for which in the email traffic is becoming more and more realized ... and even modest by some analysts' measures).

Let's briefly review Gold's performance across the breadth of the prior two -50% S&P crashes:

  • First we've the -50% DotComBomb which lasted from August of 2000 into October of 2002: Gold's change for the same period was +21%;
  • Second was the -50% GlobalFinFlop which lasted from October of 2007 into March of 2009: Gold's change for the same period was +33%;
  • Today (unless everything we were taught was wrong or is no longer relevant) we continue to await the "Look Ma, No Earnings!" crash, which even if -50% would still find the S&P 500 "expensive", but Gold again materially higher.
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