Gold: A Top Or Just Overbought?

While some gold bugs in the West are nervous that gold “might fall down”, in the East the world’s most savvy gold market investors are waiting in earnest for… a price sale of significance to buy. 

This is the short-term chart for gold. Is a significant price sale beginning now, or is it already over?

For short-term gamblers, gold has already dipped $30 and $2910-$2900 is support, but there have already been quite a number of these profitable plays this year, and it may be time for gamblers to take a break. 

Gold is massively overbought (basis Stochastics) and a possible one-day reversal is apparent in today’s early morning trade.  

I’ve regularly noted that a rally to $2950 would put gold about 5% above the $2800 support zone, and last night’s surge to $2940 has basically accomplished that move.

Investors should strongly consider buying gold, silver, and senior and intermediate miners if gold trades at or near $2800. Further buying is recommended at $2725 and $2600.

This is a stunning chart of the relentless failure of fiat versus gold. My strongest suggestion is this:

Western gold bugs should adopt an Eastern mindset and focus on using fiat money to get more gold, rather than using their gold to get more fiat.  

This is a key weekly chart. It seems almost surreal that gold has surged about $350/oz since the year began…

But this kind of momentum-oriented rally is typical when Stochastics (14,5,5 series) flashes a buy signal in the 50 zone. I urged aggressive gold stock enthusiasts to buy, and it’s been a very sweet ride.

It’s time to book some profits, while noting that gold could still surge hundreds of dollars higher before a correction of significance occurs. 

It’s vital for investors to sell to book profits into this kind of strength… without calling a top.  

Amateur investors like to sell at exact tops. If an investor sells at an exact top, a major top, what they really did… was barely get out alive. Continued attempts to sell like that tend to result in failure and significant investor pain usually follows that failure.

Here’s the bottom line: It’s not time for gold market investors to call a top, but it is time to do some selling, to get richer! 

A daily focus on the big picture is critical for investors as inflation, tariffs, the 2021-2025 war cycle, a wildly overvalued stock market, debt ceiling horror, and empire transition dominate the investing landscape. I cover this 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 “special offer” that investors can use to get in on the winning action and meticulous analysis. Click this link to get the offer or send me an email and I’ll get you a payment link. Thanks!

This is an enticing weekly GDX chart. A fresh MACD buy signal (into only its second week) is in play. Note how much room the Stochastics oscillator (14,5,5 series) has to run before becoming overbought. In addition, the “homerun indicator”, the TRIX, is beginning to turn up.  

All this technical action is in sync with the price arriving at the top of the cup, which is a mild resistance zone. It’s an ideal time to book partial profits on short-term positions, while eagerly anticipating the indicated major upside breakout.

For another look at the GDX weekly chart:

The surge from the bull wedge shown on the first chart could morph into a bigger handle or…

There could be no handle at all. Not all chart patterns are “textbook”… and given the generational undervaluation of gold stocks versus gold, investors need to be as open to a near-vertical surge in the GDX price as to a handle/pullback.

What about the tariff tax tantrum being thrown with gusto by the US government? Will that affect gold stocks positively, negatively, or not at all? 

To help answer that question:

This is the long-term US rates chart. In the big picture, tariffs are short-term sizzle and Chindian growth is the long-term steak. That growth will put substantial pressure on prices. The days of US corporations generating huge profits with low-paid Chindian workers will end. The ending will bring enormous inflation and sustained higher interest rates in the West.

The rise of the Chinese gold-oriented middle class is only modestly underway and the rise of India’s even more gold-oriented middle class has barely begun.  

This is a stunning long-term GDX versus gold chart. Decades of rising gold and silver stock prices lie ahead, and most of the fundamentals relate to long-term empire transition from the fiat-oriented West to the gold-oriented East. 

A 200year gold bull era is beginning, and most of the action will involve three billion Chinese and Indian citizens trying to buy a lot more gold than the world’s mines can provide. The bottom line: Good gold stock times are here, and great ones are near!

Thanks!

Cheers

St

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “Get Jacked With J!” report. I highlight key GDXJ stocks that could surge after Fed man Jay’s speech this week! Both core and trading position tactics are included in the report.

Stewart Thomson

Galactic Updates

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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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