Gold: A Week Of Pain & Then More Gain

With war, debt, the dollar, and rates all in play as key drivers for gold, what’s next for the price?

For some technical insight into the matter:

Gold became overbought two weeks ago as it once again approached the $2000 “line in the sand” zone, and it has been forming a H&S top since then.

The top was almost eliminated with the post jobs report rally, but unfortunately that didn’t happen and last night the price broke through the neckline.

The good news is that the current drop is likely forming a big right shoulder of a substantial inverse H&S bottom.

The right shoulder low is most likely to occur around the $1930 zone… but it could be as high as $1950 or as low as $1900. 

It’s also likely to be violent and should be over within a week. From there, a multi-month rise to $2080, $2200, and $2480 is expected.

A big H&S top for rates appears to be forming now. The bottom line:

A substantial right shoulder low for gold is likely to correspond with the right shoulder high for rates. 

US rates and gold usually move inversely, except when extreme events are in play. The Gaza war saw both gold and rates surge but…

Now that most of the shock of that event has subsided, gold is swooning hard on short-term rallies for rates, and not rallying much when rates do drop.

In a nutshell, the rates/gold relationship is stabilizing… at least for now.  

Unfortunately, the hideous 2021-2025 war cycle still has 26 months remaining, so more horrifying events are likely to surprise almost everyone in both 2024 and 2025.

These events are almost certainly going to be the next big upside drivers for gold.

If the dollar can reach 106-107 on this DXY chart, gold likely makes its low at $1950-$1930…

But a final push higher for the dollar is a potential scenario, and that could see gold bottom at $1900.   

The bottom line: The Fed isn’t “officially” done with its hikes until the end of the year… or at least until the Dec 13 Fed meet.  

So, the “hawk talk” from the Fed and Western gold market analysts is likely to continue until then. That would support the dollar and rates while keeping some pressure on gold. 

A consistent focus on the big picture is critical for gold and silver market investors. I cover that picture 5-6 times a week in updates just like this one, in my flagship Galactic Updates newsletter. At $199/year, investors feel the price is too low, and I’m doing a $179/15mths special offer that investors can use to get in on the winning action. Click this link to get the offer or send me an email and I’ll get you a payment link. Thanks!

Oil is soft, but traders appear to feel that’s partly because geopolitical tensions are dissipating… 

That means it’s not much of a tail wind for gold.

Some gold bugs may wonder why the horror being experienced by the citizens of Gaza isn’t viewed as an increase in tension, but COMEX commercial traders appear to be focused on the potential for the war to spread to Iran.

That has yet to happen, and if the mayhem is mainly just in Gaza, it’s no longer much of a driver for gold.

What about the mines? 

Double-click to enlarge this short-term GDX chart. There’s a beautiful multi-shouldered inverse H&S pattern in play.

For a look at the daily chart,

Tuesdays are often a soft day for both the metals and mines. It’s possible that most of the second right shoulder forms today. In a nutshell, this pullback is just a brief nightmare; soon it will be morning and the miners will not only rise, but shine!

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

Note: We are privacy oriented. We accept cheques, credit card, and if needed, PayPal.

Written between 4am-7am. 5-6 issues per week. Emailed at aprox 9am dailyhttps://www.gracelandupdates.com/

https://gracelandjuniors.com

www.guswinger.com

Email:

[email protected]

[email protected]

[email protected]

Rate Sheet (us funds):

Lifetime: $1299

2yr: $299 (over 500 issues)

1yr: $199 (over 250 issues)

6 mths: $129 (over 125 issues)

To pay by credit card/paypal, please click this link:

https://gracelandupdates.com/subscribe-pp/

To pay by cheque, make cheque payable to “Stewart Thomson”

Mail to:

Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada

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?

********