Gold's Near-Term Brush With The 1600s


No, we're not revising downward our Gold forecast high for this year of 2401.

However, from the "Nothing Moves in a Straight Line Dept." -- and as has been our cautionary concern of late -- Gold's weekly parabolic trend just flipped from Long to Short. To which, (employing our slide rule, protractor and French curve), we find Gold's nearby structural support zone ranging from 1789 down to 1672: hence this piece's suggestive title.

Either way, here it all is by Gold's weekly bars from a year ago-to-date, the rightmost encircled red dot heralding the new parabolic Short trend and the 1789-1672 structural support as delineated:

"But, mmb, wouldn't it be a stretch for Gold to then get all the way up to 2401 from 1672?"

'Twould at first blush so seem, Squire, even with some 10 months left in the year's balance. Not that 1672 shall actually trade: indeed Gold just settled the week yesterday (Friday) at 1783, an ample 111 points above 1672. Further in reviewing the past five years of Gold's overall uptrend, therein just three of the past ten parabolic Short trends incorporated drops exceeding 100 points.

Still to Squire's query, were Gold to sink during this parabolic Short trend to as low as 1672, yet then nonetheless recover all the way up to our year's forecast high of 2401, 'twould be an increase of 43.6% within 10 months. Can Gold do that?

Absolutely! Gold has done exactly that on multiple occasions across the last 15 years. The following table depicts those stints of mutually-exclusive up-runs of at least 43.6% within 10 months for Gold; the bottom row then hypothesizes a repeat of same should Gold (GLD) have a near-term brush with the 1600s, as measured from the structural support low (1672) up to 2401:

And from the "Oh By The Way Dept.", have you been tracking Cousin Copper (JJC)? Well, 'tis worth following, (see our 28 July 2018 missive entitled "Gold is Copper???", wherein is detailed the positive correlation of the yellow metal vis-à-vis the red metal). Moreover, 'tis said that broadly Copper leads Gold. And of late, Copper is doing great given post-COVID expectations for economic expansion, China being a leading consumer of Copper, and anticipation for ramped-up inflation. Thus within that context in looking at the percentage tracks of Gold and Copper from one year ago-to-date, think Gold has some catching up to do?

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