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Gold: should investors feel compelled to buy?

Commentaries & Views

Oct 10, 2023

  1. Is it coincidence that the next big phase in the 2021-2025 war cycle (Israel/Gaza) began precisely as gold hit my massive $1810 buy zone?

  2. Double-click to enlarge this stunning short-term gold chart.  Coincidence or not… the next phase of the war cycle and a major gold price rally are both now in play.

  3. I urged gold bugs of the world to step up to the buy plate as gold approached $1810…and to do it with an “across the metals board” approach, meaning buy gold, silver, and the miners aggressively.

  4. Investors who bought are likely now in a “golden driver’s seat” and could stay there for many months to come.  For a look at the weekly gold chart basis OUNZ-AMEX.  Double-click to enlarge.  The $17.50 zone is the equivalent of $1810 gold in the cash market.  It’s clearly a superb zone of support.

  5. Double-click to enlarge this bearish interest rates chart.  The ten-year bond/note has a “showcase” double top pattern…

  6. And it could soon become part of an even more bearish double-headed H&S top.  Rates looks set to tumble!

  7. For a look at the rate-dependent DXY dollar index.  Double-click to enlarge.  With Israeli and Gaza “Gmen” preparing for a long, long war, gold could mirror the action with a big rally.  This, while the dollar melts down from a textbook H&S top with its uptrend line snapped. 

  8. To say that “All lights are green for gold!” is probably a significant understatement of the current situation.

  9. What about the stock market?  Double-click to enlarge.  Both stocks and gold look set to rally as rates sink and the dollar collapses.A rally back to the H&S top neckline is likely for the Dow, and to $1900 for gold. 

  10. From there?  Well, at that point gold is likely to pause while the stock market gets into trouble and begins a new and ominous leg down.

  11. Stock market investors could push rates even lower as they panic-sell the stock market and panic-buy bonds.  That would be more good news for gold.

  12. For a look at silver.  Double-click to enlarge.  While silver does best in an out-of-control inflation environment, it’s showing good performance versus gold as Israel and Gaza take the lead war cycle baton from Russia and Ukraine.

  13. The bottom line: Silver is already back to the equivalent of the $1883-$1900 August lows for gold, and while gold looks great, so far it is only back to $1865.

  14. Double-click to enlarge this action-packed oil price chart.  While I issued a “Sell some oil and buy anything linked to gold!” call at $93 oil and $1810 for gold, both oil and gold could be poised to soar; oil has built a high right shoulder as part of an ultra-bullish inverse H&S pattern.

  15. What about the fundamentals?  They are bullish too. One of America’s most maniacal war worshippers may be the nation’s president, “Chickenhawk Joe”.

  16. Joe has been trying to get his Saudi counterparts to sign on to a “security pact” that would include Israel and lots of weapons from America.  In return, the Saudis would ramp up oil production to bring the price down. 

  17. Now, with Saudi arch enemy Israel suddenly at war with Hamas in the Gaza strip, the Saudis could kill the deal.  If they killed it publicly and with fanfare,oil could shoot past the key round number of $100… and do it more violently than a chainsaw going through a block of melting war cycle butter!

  18. With “Queen Gold Bullion” looking fabulous on her rally from $1810, gold stock bugs deserve some equally awesome technical action in the miners.  The good news is that they are getting it, and this could be just a warm-up for a much bigger move in the coming months.

  19. Double-click to enlarge this GDX daily chart.  A surge to $36 looks increasingly likely.

  20. For a look at the even more impressive weekly chart. Double-click to enlarge.  Note the bullish oversold position (and inverse H&S pattern) on the Stochastics oscillator at the bottom of the chart.  Both RSI and Stochastics are showcasing a classic bullish non-confirmation with the price, and the BPGDM sentiment index is wallowing at about 10… where major rallies have begun in the past.

  21. If investors didn’t buy near my gold $1810 zone, is it too late to buy now?  Well, the best time to buy is always when the both the price and investor morale are weak.  Buying high can be followed with emotional disappointment. 

  22. Having said that, the miners have not rallied excessively from the gold $1810 zone and Tuesdays are often a soft day for the price.  Today is Tuesday.  Investors may get a chance to buy their favourite miners a bit lower than yesterday’s closing price today. 

  23. Lastly, and on a sad note, I’ve learned that Jim “Mister Gold” Sinclair just passed away.  As a tribute, I’ll note that at the biggest support zones for gold, Jim’s immortal words were, “I’m compelled to buy!”. 

  24. I’ll suggest that every gold bug in the world may wish to consider repeating these words with gusto today!


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