Gold Bubble Weekly Update #9
Disclaimer: This is not meant as financial advice and is for entertainment purposes only.
This past week has certainly been a test for the gold bugs. We have been seriously threatening the $1,300 support, which has held us up all year. The DXY rallied hard after breaking through major resistance. The S&P also had a nice bounce before the weekend.
I can’t remember the last time I felt this excited watching the traditional markets! As Asia opens we are going to see some critical levels tested across all asset classes mentioned above. In the following article I will explain why I still feel good about the short, middle and long term for gold.
Short term
Although we briefly dipped below the prior low, we appear to be bouncing nicely off of the Ichimoku Cloud. At a minimum I expect us to bounce to $1,330 and think it is more likely that we bounce to $1,355.
I opened a margin long with a $1,349 price target, mostly based off of the longer term range we have been trading in.
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The DXY looks like it is in need of a pullback, and it generally has an inverse relationship with Gold.
Mid Term (1 - 6 months)
The SPX is due to fill some gaps that have been left wide open over the past year. The longer we can support above $1,300 the more likely it is that we will break through $1,370. If we break through $1,370 then it is game on! The S&P breaking down below $2,530 could be just the spark we need.
Long Term (6 months - 10 years)
Put yourself in the shoes of the proverbial “smart money”. Which one do you sell and which one do you buy? If you zoom out far enough the picture usually becomes pretty clear. As far as I am concerned it is not a question of if, but a question of when.
It will be within the next 2 years, mark my words!
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