Apr 25, 2023
- Gold has moved sideways for the past month (with an upwards bias), but the first week of May could bring some very big news from the fear trade side of the pond:
- May 3 (next Wednesday) is the next US central bank rates decision day, and there's an important speech from Jay. May 4 brings an ECB decision and speech from Lagarde. May 5 is the US jobs report and a full moon.
- How important are these events for investors? Well, it's important to note the difference between a professional investor and a professional fund manager. The professional fund manager has a phenomenal sales team. They are very good at securing a consistent flow of investor capital and they invest all of it immediately.
- Fund managers get quoted frequently by mainstream media and offer what are mostly irrelevant prognostications about the future. They do well when the market rises and fail when the market falls.
- In contrast, the professional investor has patience. They wait to buy significant price sales that offer substantial value at major support zones.
- The gold market is unique because its professional investor class includes both COMEX commercial traders and hundreds of millions of citizens in China and India.
- Double-click to enlarge this key US stock market chart. I've only issued four buy signals for the US stock market over the past 30 years and there's no significant price sale in play at the current time.
- So, next week's reports may seem important, but they are irrelevant for professional stock market investors.
- What about oil? Double-click to enlarge. I highlighted the huge bull wedge pattern as it formed, but warned professional investors that the buy zone was $65, not just a "breakout" from the wedge.
- Next week's reports are likely to simply help with more right shouldering of the inverse H&S pattern now in play.
- Oil is likely going to $200 and higher in the coming decade, and there's a decent price sale from $130 in play. It's likely a far better investment than the US stock market, but significant patience is required.
- What about gold? Gold is of course the world's ultimate currency and asset. Dollar bugs are underestimating the role that US sanctions and wars are playing in de-dollarizing the world.
- It doesn't matter if America's favourite chicken hawk (Joe Biden) tries to end the Ukraine horror; the damage is done, and trust is lost. Every day, millions of citizens around the world wonder when American "Gmen" will target their own dollars with sanctions or confiscation, and they want their wealth out of the danger zone.
- If US Gmen go to war in Taiwan and pound Chinese citizens with sanctions and assets confiscation, the current tidal wave of de-dollarization will turn into a global hurricane.
- Central banks and citizens of the world are turning to gold to diversify away from an American empire that has become the type of meddler and thief that the empire once stood proudly against.
- It's almost comical to watch US republicans and democrats wasting precious time trying to fix with fiat what can only be fixed with gold. In the coming decades the failed fixers will only become more frustrated (and violent), as their "repair the empire" schemes fail even more badly than they are failing now.
- Tactics? Double-click to enlarge this key gold chart. I use the 6,90 weekly moving averages to indicate major changes in trend. All moving averages have some failed signals, but the 6,90 is very good at highlighting the start of massive moves in the price of gold… and a positive signal is in play now.
- With regard to actual buy orders, I like to see at least a $100/oz price sale and weekly chart RSI and Stochastics oscillators down to at least the 50 area. That hasn't happened yet.
- The bottom line:Investors who have no gold can buy a grub stake now and all investors should have solid core positions in gold, silver, and the miners… but for additional positions, I need to see a bigger price sale, more oversold oscillators, and a breakdown in emotional sentiment.
- Double-click to enlarge this short-term gold chart. I put the odds of a surge to $2080 versus a dip to $1900 at 50:50. Having said that, if the dip scenario plays out, it likely forms an inverse H&S bull continuation pattern with a target of about $2220.
- The miners? For years the miners have struggled to achieve sustained outperformance against gold, but the winds of change may be blowing, in de-dollarized air!
- Double-click to enlarge this short-term GDX chart. A bull wedge that is best described as "nifty" is in play within a large bullish channel.
- For a look at the daily chart. Double-click to enlarge. Gold stock investors have every reason to feel positive. Mine stock prices rise and fall, but the action on the chart is incredibly positive. On this daily chart, both RSI and Stochastics are already down to the 50 "momentum zone" area where big rallies can occur. Given that $33 is also key support, investors should be in a buoyant mood.
- The bottom line for gold, silver, and the miners may be this: while a US government named Humpty sits on his fiat, debt, and global meddling wall… it's only a matter of time before he has a big de-dollarized fall!
