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Gold $1835: it's where the miners come aliver

Commentaries & Views

  1. Given that the US government has lost almost every war it has ever fought, should investors and regular citizens be concerned that the current de facto war against Russia will end at least as badly as all the others and… what does this mean for gold?

  2. Double-click to enlarge this "memory lane" big picture chart for gold.

  3. For investors, fundamentals determine the direction of the gold price, but the best buy zones for gold are defined by enormous support zones on the weekly chart. 

  4. Gold doesn't always pullback to these support zones (as in the case of $458), but when it does ($580 and $728 being great examples)… investors need to muster the courage to buy not just gold bullion, but a lot of the miners too!

  5. For a look at the current market and some "buy zones of champions". Double-click to enlarge.  The $1835 support zone is of particular interest.

  6. Investors should never cheer for a gold price pullback any more than cheering to get punched in the face in a boxing ring, but it happens.  

  7. If gold trades at $1835, it's an outstanding area to buy the miners.

  8. In terms of the fundamentals, the long-term picture is pristine. It's about gold-oriented citizens of China and India restoring luster to gold… as the ultimate private currency of the people of the world.

  9. In the short and medium-term, the Ukraine war and the Chinese government's war against Corona are exacerbating supply chain issues, but the economy of China is also suffering, and that's putting some pressure on the demand for oil.  That in turn is pressuring gold.

  10. Double-click to enlarge this important oil price chart.  It's likely that the war mongering US government will continue to "poke the Russian bear", while the draconian lockdowns in China are temporary.

  11. That makes the oil price weakness temporary too, and since gold is trading in sync with oil, the current weakness is likely a major buying opportunity, with the lowest risk/highest potential reward entry point being $85-$75 for oil and $1835-$1785 for gold.

  12. What about the dollar's purported strength, is that a headwind for gold?  Double-click to enlarge this horrifying dollar versus ruble chart.

  13. While US financial media boasts about the dollar's rally versus the euro, yen, and franc, little is mentioned about the mauling of the dollar by the ruble.

  14. This mauling is occurring while the US government barely goes a day without announcing a new economic attack against the citizens of Russia, with the stated goal of wrecking the ruble.

  15. The bottom line: After losing every war it fought for the past 50 years, the US government now can't even win a currency war against the "second world" currency ruble, even with most governments and global reserve currency status on its side!

  16. Gold bugs have little to fear from the dollar if it's failing this horrifically against the ruble when it should look like an Apollo rocket headed straight for the moon!

  17. Sadly, the unstoppable demise of the American empire is beginning to resemble the demise of Bozo the fiat clown.

  18. With American government debt in the stratosphere, rate hikes are starting to turn the US bond market into Bozo's twin brother, but is there hope for the nation's stock markets?

  19. Well, it doesn't look good there either.  Double-click to enlarge this incredibly disturbing SP500 CAPE ratio chart.  The "buy the dip" mantra works fairly well, but only when the ratio is 20 or lower, and only if stoplosses are used. 

  20. At the current nosebleed level of about 33, the necessary mantra may soon be, "Sell in May, or get blown away!

  21. A daily focus on the big picture is going to be critical for investors as inflation, the 2021-2025 war cycle, a wildly overvalued stock market, and empire transition dominate the investing landscape.  I cover that big picture 5-6 times a week in my flagship Galactic Updates newsletter.  At $199/year, investors feel the price is too low, but I'm offering a $179/15mths "super special" that investors can use to get in on the action, or to extend their existing subscription.  Click this link to get the offer or send me an email and I'll get you a payment link.  Thanks!

  22. The good news for gold bugs is that the best risk versus reward ratio of any market continues to be found in buying the miners at key support for gold bullion.

  23. On that note. Double-click to enlarge this GDX daily chart.  It's quite possible that the reaction low occurred yesterday.  GDX is near support of $34.50 and the recent gold bullion lows of $1895 do offer an entry opportunity with a stoploss.

  24. This is a great time to cover "against the box" short positions but it's not quite time to buy.  The big entry point for the miners comes near a gold price of $1835 or on a breakout above $41.60 for GDX and $2080 for gold!
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.