Gold’s Next Target – Craig Hemke
Gold’s Next Target – Craig Hemke for Sprott Money
TDC Note – It appears the Turd and I are pretty close in our assessment of the gold market.
Since late May, the price of COMEX Digital Gold has been on a tear with a rally of over $200. Will this surge continue? Perhaps more importantly, can this surge continue?
First of all, and so that we’re on the same page, none of this should come as a surprise to regular readers. Since last November, we’ve been stating that 2019 would show the best gains for the precious metals since 2010, and we are now well on our way. Here are two links to review, the first from January, the second from May.
Regarding price, here’s a relevant section from the article posted on January 15, 2019:
And this from the article posted in May, written during an $80 price decline, practically begged you to hold fast and not allow yourself to be shaken out and scared off:
So now here we are in early August and what has happened?
• The Fed has indeed capitulated. They have already cut the fed funds rate once, and their program of “Quantitative Tightening” has been prematurely halted.
• The global economy is demonstrably slowing, and central banks are reacting with promises of more rate cuts and fiat creation.
• The global bond market is soaring, with the total global amount of negatively-yielding debt now exceeding $15 TRILLION.
• In late June, COMEX gold broke out of a six-year price range by surging through $1360. It’s now around $1480 and rising due to this week’s trade tensions.
So, what’s next? That’s a tough question. Why? Because The Banks remain in charge of the fractional reserve and digital derivative pricing scheme, and as such, they will continue to intervene and attempt to force resistance and reversals… particularly when the speculating hedge and technical funds get overly excited and amass huge positions in COMEX futures.
However, price is now at a very important point, as the area between $1485 and $1525 is extraordinarily important. If price can surge through this level, the stage will be set for an eventual rally back to the old all-time dollar price highs. This would be logical to expect given that gold priced in British pounds, Australian dollars, Canadian dollars, and so many other currencies are already currently trading at all-time highs.
Why is $1485-$1525 so important? Three major reasons:
1. COMEX gold has not posted a weekly close above $1485 since the major smash of April 2013.
2. The bear market from 2011-2015 took price from $1920 to $1085. A 50% retracement of this move takes price to $1503.
3. At the end of the 2003-2011 bull market, $1525 acted as strong support for over nineteen months before being taken out in that April 2013 smash. You should expect that area to now be stout resistance on the way back up.
On the weekly chart, it looks like this:
So watch $1485-$1525 VERY CLOSELY in the days and weeks ahead. If the bond market keeps rallying, The Fed keeps cutting, and the global economy keeps slowing, a move through this extremely important area becomes inevitable. When this finally occurs, the stage will be set for a return to the old, all-time dollar-priced highs. Once this happens, we’ll update the charts again with the next level of projections.