The Golden Gridline Rules

To view what is arguably the most important chart in the world,

The dip in the gold price over the past few days doesn’t change anything on this long-term chart. The bottom line is this: Like money, gold is clearly superior to fiat.  

A lot of new investors to gold try to compare it to the stock market. That’s a mistake; gold is a currency, and it should be compared with other currencies.

Bitcoin is also a currency. It’s superior to fiat… and inferior to gold.

Bitcoin has outperformed gold and probably will continue to do so, but that doesn’t make it the ultimate currency that gold is.

I regularly urge crypto investors to put most of their enormous profits into gold currency rather than into risky government fiat.

What about gold stocks? Well, conspiracy buffs are concerned about naked shorting.

That concern may be valid, but even in the 1980s and 90s, most gold stocks acted more like trading vehicles than something to buy and hold.

the second most important gold chart in the world

I’ve established key “gridline rules” for gold-stock investors, and rule number one is to focus most buying on weekly chart support zones for gold bullion. 

I tweak that buying with the 14,5,5 Stochastics series oscillator and the 5,15 moving averages. There are currently no “green shoots” in play, but it’s only a matter of time before those shoots begin to sprout.

Since gold reached major resistance in the $2000 area last summer, it’s traded at two major support zones ($1778 in November 2020 and $1671 in March 2021).

Investors who bought miners there got fast profits of about 20%-30% in the intermediates and seniors, and more in the juniors.

 Time in the market is time that an investor’s money is exposed to potential reward, but it’s also time that their money exposed to substantial risk.

If a mining stock investor can make 40%-60% (and more with juniors) a year by exposing their fiat or gold bullion capital to mining stock risk for just 3-4 months of a calendar year, does that make more sense than just a buy and hold approach to betting on inflation and America’s demise? I think so!

There’s no question that inflation is going to be a major long-term problem for America (and the world), and so is the horrifying debt.  

The biggest problem is fiat itself. Fiat money is the enabler of debt, inflation, war, and the welfare state. In a nutshell, 99% of the problems that plague America (and most nations including China and India) can be traced back to… government fiat money.

When debt, inflation, and other problems reach “flashpoints” as gold trades at major weekly chart support, investors have a strong wind at their backs.

shocking long-term XAU gold stocks index chart

The XAU is currently trading where it was in 1984, almost 40 years ago!  

Long-term investors correctly believe the American empire is being destroyed by its fiat currency obsession, but if their buy and hold focus is the miners rather than gold bullion, most of them have not been financially rewarded and may have losses.

On the other hand, investors who followed my gridline rules for the miners have performed incredibly well. They are ready for the next major opportunity I have outlined for them… at either $1566-$1450 or $2089-$1966.

GDXJ “money train” chart

The money train is not at a gold bullion support zone “train station”.There’s no need for investors to board the train… yet!

A stock market sell-off in September or October could see gold reach $1566.A debt ceiling fiasco could see a surge to $2089.These are the big fundamental events and the key numbers for gold. Investors are eager for action… and odds are high that the action is imminent!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “CDNX Hot Shots!” report. I highlight ten CDNX miners that benefit from higher gold prices but also follow the CDNX index when it rallies. Key buy and sell tactics are included for investors!

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

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:

Are You Prepared?

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