Gold In 2021: Will It Be Fun?

1.   Gold stock enthusiasts who bought metals and miners at my key $1788 buy zone for gold are looking very good.

2.   Double-click to enlarge this weekly gold chart.

3.   The $1767 low is also now a buying area.  On the sell side, $1966-$2089 is a good spot to do some profit booking.  The bottom line:

4.   Investors who followed the Edwards and Magee support and resistance weekly chart rules did well in 2020, and it should be another great year in 2021!

5.   For a daily chart look at the price action, double-click to enlarge.  Gold is likely to pause at the first thin line of resistance that I highlight in red on the chart.

6.   The good news is that $1851 area lows may support any pullback, but a second dip towards $1788 and a test of the $1767 lows should not be ruled out.

7.   It is unfortunate that a bit of a stone age mentality about gold exists in the west.  In China and India, good news like the Corona vaccine is celebrated by the citizens with enthusiastic purchases of gold.

8.   In contrast, western investors tend to sell gold when there is good economic news.  This is a deranged approach to the world’s greatest asset, but there are substantial liquidity flows from these “fiat-obsessed cavemen” and that does affect the price.

9.   Many bank and stock market analysts feel that success with vaccines will create substantial global economic growth by the second half of 2021.

10.  The growth is likely to happen, but a Biden administration will almost certainly raise taxes and wages, especially if growth accelerates. 

11.   That is inflationary, and given the government’s obvious addiction to debt, the inflation could be a lot higher than anticipated.

12.   Most analysts failed to anticipate the 2020 virus cycle.  Will they fail again in 2021 with inflation?  I think so. 

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