Gold just broke out from the substantial congestion zone that began forming about four months ago. The big question for bugs around the world is obviously: Is the breakout real?
Some insight into this exciting matter. What can be said is that the breakout above the key highs at $3440 is almost certainly real, but there is no real breakout above the “final” high of $3500… yet.
The $3440-$3380 zone now offers decent support for any pullback that occurs before there’s an exciting blast through $3500 and a surge to the $3800-$4000 target zone.
Note the action of the key 14,7,7 series Stochastics oscillator at the bottom of the chart. Significant breakouts usually occur with the oscillator in this overbought position.
The truly awesome weekly chart. All the technical lights are now bright green!
A pullback to the triangle breakout zone would be normal, but it doesn’t have to happen. The action of the 14,5,5 series Stochastics oscillator is best described as “outrageously bullish”.
The most important caveat for investors is to focus on the nature of what gold is; it’s supreme money.
Whether it dips $50 or $100 in the breakout zone or not is irrelevant to what gold is. It’s irrelevant to the 40year US inflation cycle… a cycle that is only in year five now.
It’s even more irrelevant to the Chindian citizen-oriented gold bull era that is only in about year 25 of what is likely a 200year era. “Stay long and strong!” is the mantra of the world’s most savvy supreme money enthusiasts right now… and rightly so. In a nutshell: ranges are for trading, trending moves are for investing, and a trending move appears set to begin now.
Some Western gold bugs who missed the immense rally from $1800 in 2023 to $3500 may have done so because they were overly concerned about the state of the US government and so they focused on the government instead of gold.
These well-meaning but lost investors may be waiting for the US government to revalue gold. Sadly, they may find they are waiting for Godot in that regard. The bottom line: Every month that passes with no gold buy program in play is a wasted month and horrifically, the US government seems to be addicted to wasting one month after another.
The good news is that citizens don’t need to be as sloppy as their governments are. They can start their own buy programs, focusing on gold price sales of about 5% for their purchases.
What about silver? ’s upside breakout came months before that of gold… and it’s now the precious metals market leader. A charge towards $43, then the $50 highs is likely, and as noted, both an inflation cycle and a bull era are in play. Silver is likely to get immense investor respect for many decades to come.
Oil is staging its own upside breakout this morning. Instead of embarking on a fabulous gold buy program itself, the US government is wasting time trying to force Indians to kill their Russian oil purchases. That’s a doomed scheme.
Clearly, this won’t end well, just as forcing a relatively tiny US (fiat and debt-oriented) workforce to compete with 3 billion gold and savings-oriented Chindians won’t end well. To add to the nightmare, the SP500 CAPE ratio hit 39 last week, which is the second highest overvaluation peak in the history of the nation.
The icing for this rancid cake? Sadly, the US central bank has consistently failed to lower inflation to its 2% goal, and while new inflationary pressures emerge, the nation’s government is engaged in a macabre celebration of that failure; it’s calling for a literal boatload of inflationary interest rate cuts!
Gold, silver, and miners are the obvious go-to play for savvy investors in this inflation cycle, bull era, and government/central bank failure situation, an exciting look at the miners. The CDNX is breaking out (again) against the Dow. It looks unstoppable and given the ludicrous central bank and government “odes to inflation”, investors need to think about vastly bigger numbers, for both time and price.
What I’ve dubbed as one of the three most fabulous charts in the history of markets. Note the subtle rise in volume at the bottom of the chart. That’s occurring on the magnificent rally to the massive inverse H&S pattern neckline, and I expect there to be a stupendous blast of volume on the breakout.
Many CDNX individual component stocks are staging barnburner rallies, and many more are coming. Junior mine stock investing isn’t for everyone, especially with size, but as the gargantuan gold bull era rollout continues, these miners look set to outperform everything!
For the past several years, I’ve also been urging senior mine stock enthusiasts to study the exciting CDNX action, because it’s been presaging what lies ahead for all gold and silver mining stocks.
Money managers are pouring capital into stocks like and and it’s only the beginning of what I call, “The Awakening”. Rates may be set to rise again as courts order the US government to refund their silly tariff taxes.
That’s only going to create more concerns about the stock market and more enthusiasm for gold and the companies that mine it.
What is clearly another of the greatest charts of all time. The inverse H&S pattern of gold stocks versus gold is immense and the bullish action may not end until the inflation cycle ends in the year 2060. In a nutshell:
The time is now for amateur gold bug investors to cast aside their fears and take part in all the upside action they thought would occur at the 2011 highs… and continue to take part in it for the next 35 years!