The Fed: Turning Gold Stocks Into Shooting Stars

The magnificent gold price rally has paused in the $1300 area for the past few weeks. Monday was COMEX option expiry day. 

With that now out of the way, gold is already staging more upside action!

Double-click to enlarge this daily gold chart.  

A bullish upside channel breakout is in play and the consolidation was a flag-like pattern.

Also, note my key 14,7,7 series Stochastics oscillator at the bottom of the chart. A buy signal that occurs in the 40-60 area is a momentum-oriented signal, as opposed to a value-oriented signal that occurs in the 0-20 area.

These are technical signs of a tremendously healthy market.

Double-click to enlarge this spectacular long term gold chart. 

The technical excellence being showcased on the daily gold chart is typical during rallies from the final right shoulder low in this type of enormous inverse H&S bull continuation pattern.

I’ve been almost alone amongst gold analysts in suggesting that the brief five-year decline from 2011-2016 was a typical “ho hum” correction in a bull market rather than a “vicious bear market”.

There’s no question that junior gold stocks experienced a bear market then, but they have experienced a myriad of bear markets since the gold bullion bull market began in 1999-2002.

Gold bullion bull and bear cycles last a long time. Twenty years is a short period of time for a gold bull or bear market, and many last a century or longer. 

I’ve predicted that this bull market will last a minimum of a hundred years, and more likely two hundred, and I stand by that prediction without wavering.

Most of the world has been in a deflationary cycle since 1980. That’s when global bond yields peaked. Gold stocks tend to crash repeatedly in a deflationary cycle along with stock markets.

In an inflationary cycle, gold stocks rally when stock markets rally… and they rally when stock markets fall. In August of 2018 I told investors to get ready for a sea change event; I predicted global stocks would crash in September-October, and gold stocks would surge higher as the stock markets crashed. 

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