Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Mega Bullish Technicals, Wow!

Commodities / Gold & Silver 2009 Oct 11, 2009 - 02:17 PM GMT

By: Adam_Brochert

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleIf you're not into technical analysis, you're not into it. I understand. Drawing squiggles on a chart seems like reading tea leaves to many. I get it. I personally believe that it increases your odds of success if you have the fundamentals right. In other words, technical analysis in isolation is not attractive to me, but laid over a solid foundation of fundamental analysis makes sense to me.


The Gold price chart, denominated in U.S. Dollars, makes sense to me. It is a thing of beauty. It is a Picasso for those who care to try their luck at reading price charts.

Here's a 2.5 year daily chart to show you what I mean:


The symmetry is perfect. The break-out is textbook. Can it fail to materialize and can Gold fall significantly from here? Yes. Investing/Speculating is never certain (I learned that when shorting the market last May and June). But those calling for a failure or steep correction here in the U.S. denominated Gold price are ignoring the dominant trend:



Gold has increased by 4-fold since the turn of the century. The mainstream sees Gold is going higher and is skeptical. Apparently it is a bubble according to some. Come on. You're telling me that an asset class that rises in value 4-fold over a decade is a bubble? Yeah, OK. We'll ignore the recent history of paper fiat-inspired bubbles and play pretend. Oh, wait. Let's look at an actual prior bubble that was unsustainable and ready to pop - the NASDAQ. Here's that historical 4-fold bubble waiting to pop in 1991:



Oh, yeah, and here's what happened next in the "unsustainable" tech bubble (20 year monthly NASDAQ chart from 1980-2000):


And how about oil? What does a paper fiat bubble in energy look like at the point when everyone is doubting it can happen? Here's oil on a weekly chart from 1999 to 2004:



And we all know what happened next with oil:


Those who think it is not possible for Gold to have a similar chart - I get it. No growth, no dividends, just a piece of metal, blah, blah, blah. But when the system breaks down due to too much debt and too many paper promises, the bubble swings the other way. Invest where you want. But me, I'll bet on Gold.

I'll bet that a shiny piece of metal will outperform the hubris of a small group of men and women willing to risk systemic failure to maintain profits. Call me cynical if you wish, but I believe a one or two ounces of a shiny metal will be equal in value to the entire Dow Jones Industrial Average before this bust is over. It happened in the 1930s and it happened in the 1970s, both during the context of secular bear markets in stocks like the one we are smack dab in the middle of right now. The last secular Gold bull market under our current U.S. fiat paper monetary system went up 25 fold from bottom to top. We've got a long way to go. In my opinion, the bubble in Gold has just begun.

Visit Adam Brochert’s blog: http://goldversuspaper.blogspot.com/

Adam Brochert
abrochert@yahoo.com
http://goldversuspaper.blogspot.com

BIO: Markets and cycles are my new hobby. I've seen the writing on the wall for the U.S. and the global economy and I am seeking financial salvation for myself (and anyone else who cares to listen) while Rome burns around us.

© 2009 Copyright Adam Brochert - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

John Mylant
15 Oct 09, 11:45
Gold Charts are right on!

Kudos, I am with you on the "dominant trend" phrase here. Gold is on the move and though we may have a correction, I beleive you have doe a very thorough study of these charts. There is not much to add but you are right and I am behind you! Good job!

John Mylant

http://mylantsmoneyblog.typepad.com/


Post Comment

Only logged in users are allowed to post comments. Register/ Log in