This Will Confirm The Gold Bull Market
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold is moving closer to confirming a multi-year bull market per my long-term comparison. A decisive mover higher than the $1375 area would be confirmation of the bull.
Below, is the updated long-term comparison:
I have marked two fractals (patterns) 1 to 5, to show how they might be similar. I have also marked the point where interest rates peaked (in 1981), and where they probably bottomed (in 2016).
If the comparison with the 1980s pattern is justified, and the current pattern continues in a similar fashion, then gold will continue in a long bear market. However, there are just too many fundamental obstacles to such a scenario, with the state of interest rates being one of them.
A breakout at the top red line (the high at point 5 â€“ $1 375) would almost certainly signal or confirm the bull market. This would be divergence from the 1980s pattern, and likely cause prices to rise really fast once the breakout is confirmed (when dealing with fractals, the biggest price movements occur when two fractals diverge â€“ a breakout at the top red line is a divergence).
A breakdown at the bottom red line, could mean that prices will continue to follow the 1980s pattern, and go lower than $1000. Which would mean we will have to wait many years (even a decade) for the next gold bull market (very unlikely).
It is my opinion that due to the fact that the early 80s pattern occurred around a long-term interest rate peak, and the current one around an interest rate bottom, the two exist in completely different economic conditions.
The current economic conditions are ideal for higher gold prices (as previously explained), and this is what we will likely get over the next couple of years.
I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report. You can also subscribe to this blog (enter email at the top right of this page) to get my regular free gold and silver updates.