Gold Breakout Imminent: Rally on the Horizon

 Gold on the verge of a breakout Rally

 

 Unleashing the Potential: The Impending Gold Breakout

Originally published in Nov 2015 and updated in February 2020, this article offers enhanced insights and analysis.

In August, we came out and openly stated in an article titled The Gold Bull is Dead that it was not the time to buy Gold. Many analysts were calling for the bottom and much higher prices then.  We stated that there was a high probability that Gold would move lower before bottoming out. Fast forward, and that outlook has come to pass.

So let’s see what picture fundamentals paint.

Demand for Gold is soaring, according to the World Gold Council’s latest report.

The latest report shows worldwide demand for Gold soared by a whopping 33%.

Americans are jumping into the foray also; U.S. retail demand for Gold soared to 32.7 metric Tons, 200% more than in the same period last year.

The report also states that Gold demand in China Surged by 70% to 52 metric tons.

Europeans also appear to be loading up on Gold.  Demand increased by 35% to 61 metric tons.

The Gold Price Conundrum: Why Aren’t Prices Soaring?

Based on fundamentals, the dollar should have crashed long ago, as the U.S. Fed has created more money in the last ten years than in the last 100.  Fundamentals would have had you jumping into energy and oil stocks just when they tanked. Up unit the very moment oil crashed, all the experts were screaming about a shortage of oil and surging demand in Asia. The overall market in Asia continues to rise, but the same individuals are now signing a different song. Instead of less oil, they are now singing the oversupply song; oh, how fast they jump ship.

The following charts illustrate that Gold demand is increasing, so what gives?

Gold demand increasing so why are Gold prices not rising

 Investors Eyeing Gold as Breakout Looms

The chart from the World Gold Council indicates that demand for this precious metal is rising.

Central bank Gold holdings rising, so is Gold on the verge of breaking out
Central bankers are busy loading up on the metal. The main buyers are Russia and China.  Perhaps they are privy to information that the general public is not. Whatever the reason, central bankers appear to be aggressively stocking up on Gold.

Hasten slowly, and ye shall soon arrive.
Milarepa

 India Joins Gold Rush: Surging Repurchases

Gold consumer demand in India soaring,

Gold Breakout On The Event Horizon?

Fundamentals do not drive the market; they just provide a picture to justify your biased views. What causes the market is emotions, and some technical indicators can pick up on these emotional changes.  Crowd psychology is probably one of the best and least utilized tools for spotting topping and bottoming action. We are not talking about the timing of the exact top or the bottom. This endeavour is best left to fools who have nothing better else to do with their precious time.   Right now, many people are embracing Gold, but the crowd is still silent.  When the crowd joins the pack, the situation will move from quiet to explosive.

The technical picture indicates that an absolute bottom could be close at hand.   In August, in an article titled “The Gold Bull is Dead”,  we stated the following:

From the Technical analysis perspective, gold has one more leg down, but the last leg might or might not be too steep.   Every bull market undergoes a back-breaking correction, and Gold is no exception.

What’s next?

So far, most of this has come to pass. Our trend indicator is not bullish yet, so until it turns bullish, Gold will not mount a significant rally.  However, if you loved Gold in 1800, you should be nuts that it’s trading at $1100. The Gold camp is in disarray, and despair is beginning; this is the ideal time for a bottom to take hold.

When Gold topped in 2011, the Gold camp was jubilant and could only envision higher prices.  Gold is not on the verge of a breakout yet, but it could be on the point of putting in a bottom, and that would be a move in the right direction.  To indicate that a base is in place, Gold cannot close below 1050 on a weekly basis; failure to hold above this level should lead to a test of the 1000 range, with a possible overshoot to $950.

A good idea, plus capable men cannot fail; it is better than money in the bank.
John Berry

Interesting Articles 

Projected Silver Prices: Setting Sail for Precious Metal Ascension

Projected Silver Prices: Setting Sail for Precious Metal Ascension

Projected Silver Prices: Navigating the Precious Metal's Future Updated March 1, 2024 Following the introduction, we will unveil our anticipated ...
Stock Bubble lead to crashes which lead to A buying Opportunity

Stock Bubble: Act Quickly or Lag Behind

Stock Bubble: Machiavelli Meets Lynch Approach Updated Feb 29, 2024 Riches come to those who seek them and not those ...
Smart Investing Unveiled: Perception Manipulation and Sentiment Indicator

Perception Manipulation: Mastering the Market with Strategic Insight

s Perception Manipulation & Investing: Sentiment Indicators Unveiled Updated Feb 24, 2024 By the ripe age of 18, the average ...
The Contrarian Outlook - Unleashing Success

Contrarian Outlook: A Pathway to Breakthrough or Breakdown

Contrarian Outlook: Balancing the Scale of Success and Risk Updated Feb 24, 20234 Introduction Adopting a Contrarian Outlook could be ...
Market Uncertainty: the emotion that separates traders from speculators

Market Uncertainty: A Challenge for Investors

Feb 22, 2024 Discerning the Hazards of Market Uncertainty with Poise Uncertainty, a state of being unsure or not knowing, ...
Stock market basics for beginners: do or die

Stock market basics for beginners: Adapt or Die

Stock market basics for beginners Updated Feb 22, 2024 A Contrarian Investor does not follow the Herd Sol Palha  Investing ...
Why Covered Calls are a Bad Strategy

The Unfortunate Truth: Why Covered Calls are a Bad Strategy

Feb 21, 2024 INTRODUCTION Covered calls have emerged as a favoured choice among the myriad methods, glittering with the illusion ...
DJU Index: To buy or not to

DJU Index: To Buy or Flee? Unraveling the Market Mystery

DJU Index: Decoding Signals – Is it Flashing Bullish or Bearish in the Market? Feb 21, 2024 Introduction: Intriguing Developments ...
Stock Market Psychology 101: Learn, Thrive, and Profit

Stock Market Psychology 101: Learn, Thrive, and Profit

Feb 20, 2024 Understanding Stock Market Psychology Through Charts for Beginners Understanding the stock market is akin to deciphering an ...
In 1929 the Stock Market Crashed Because of Greed, stupidity and arrogance

In 1929 the Stock Market Crashed Because of Greed

In 1929, the Stock Market Crashed Because of unchecked speculation Feb 20, 2024 Introduction to the 1929 Stock Market Crash ...
Palladium Forecast: Discovering the Hidden Bull Market Trend

Palladium Forecast: Unveiling the Stealth Bull Market

Palladium Forecast: Navigating the Silent Bull Market Unfolding Updated Feb 19, 2024 The lustrous white metal Palladium is silently scripting ...
The Journey to Remove Brainwashing

Unshackling Minds: The Journey to Remove Brainwashing

Feb 16, 2024 Unshackled Minds: The Journey to Remove Brainwashing Introduction: The Tangled Threads of Thought Manipulation In the grand ...
Mastering the Trading Range

Mastering the Trading Range: Unlocking the Potential for Explosive Gains

The Trading Range:  Masterfully Navigating Volatility  Feb 14, 2024  Introduction In the ever-fluctuating world of stock markets, mastering the trading ...
Unveiling the VIX Fear Indicator: Best time to buy is when the crowd is scared

Unveiling the VIX Fear Indicator: A Case Study in Market Volatility

Harnessing the Power of the VIX Fear Indicator: A 2016 Case Study Updated Feb 12, 2024 The VIX fear indicator, ...
Mind Games: Unmasking Brainwashing Techniques in Institutions & Media

Mind Games: Unmasking Brainwashing Techniques in Institutions & Media

Unmasking the Invisible: The Subtle Art of Brainwashing in Institutions & Media Updated Feb 11, 2024   Introduction: Intriguing Insights ...