The Golden Gridline Rules

To view what is arguably the most important chart in the world,

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The dip in the gold price over the past few days doesn’t change anything on this long-term chart. The bottom line is this: Like money, gold is clearly superior to fiat.  

A lot of new investors to gold try to compare it to the stock market. That’s a mistake; gold is a currency, and it should be compared with other currencies.

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Bitcoin is also a currency. It’s superior to fiat… and inferior to gold.

Bitcoin has outperformed gold and probably will continue to do so, but that doesn’t make it the ultimate currency that gold is.

I regularly urge crypto investors to put most of their enormous profits into gold currency rather than into risky government fiat.

What about gold stocks? Well, conspiracy buffs are concerned about naked shorting.

That concern may be valid, but even in the 1980s and 90s, most gold stocks acted more like trading vehicles than something to buy and hold.

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the second most important gold chart in the world

I’ve established key “gridline rules” for gold-stock investors, and rule number one is to focus most buying on weekly chart support zones for gold bullion. 

I tweak that buying with the 14,5,5 Stochastics series oscillator and the 5,15 moving averages. There are currently no “green shoots” in play, but it’s only a matter of time before those shoots begin to sprout.

Since gold reached major resistance in the $2000 area last summer, it’s traded at two major support zones ($1778 in November 2020 and $1671 in March 2021).

Investors who bought miners there got fast profits of about 20%-30% in the intermediates and seniors, and more in the juniors.

 Time in the market is time that an investor’s money is exposed to potential reward, but it’s also time that their money exposed to substantial risk.

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