Gold's 1780s Are Driving Us Crazy!


In completing its 48th trading week of 2021, Gold settled yesterday (Friday) at 1784. 'Twas the eighth week this year that Gold has settled in the 1780s (the first occurrence being on February 19). Indeed, Gold's median weekly settle price year-to-date is 1788. Yet as anybody engaged in the Gold Story knows, Gold first traded in the 1780s a decade ago on August 9, 2011, the U.S "M2" money supply that day stood at $9.5 trillion; (today 'tis $21.5 trillion).

So to reprise that from the "You Cannot Be Wrong Dept.": should anyone ask you "off the cuff" what is the price of Gold, your instantaneous response of "1780" shall (so 'twould seem for the foreseeable future) not only be correct, but enhance your dazzling intellectual image.

To reprise as well "The M Word" crowd, clearly their parking place of preference is Gold's 1780s. Of the 233 trading days year to date, 27 of Gold's closures exceeding 1800 have -- within the five ensuing trading days -- found price settle in the 1780s, or lower. "1800? SELL!" Sheesh... Gold's 1780s are driving us crazy!

Regardless, Gold (GLD) -- and moreover Silver (SLV) -- are doing what markets do when their technicals turn negative: their price goes down. Per our Market Magnets page, Gold from 1861 on November 18, found price then pierced down through its Magnet: "SELL!" From our Market Trends page, Gold from 1847 on November 19, found the "Baby Blues" of trend consistency begins to plummet: "SELL!" From our Market Values page, Gold from 1805 on November 22, crossed below its smooth valuation line: "SELL!" More mainstream technical signals have since followed to "SELL!" And recall -- just prior to it all in our anticipating near-term selling -- we nonetheless deemed the 1800s as "safe": "WRONG!"

Having thus now driven you crazy, we obviously deem holding and buying Gold as "RIGHT!" especially as the stock market -- be this another false signal or otherwise -- finds the S&P 500 (SPX) doing its dance of a snake in death throes. To be sure we've seen such before, only to see the Index magically survive, indeed thrive. You veteran readers of The Gold Update may recall some six years ago (on January 23, 2016) our characterizing the S&P as being in such "death throes", the ensuing three weeks then finding the Index fall 5% from a "live" price/earnings ratio of 43x; (today 'tis 47x).

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