We asked our researchers a question recently, “Could Gold
rally above $3750 before the end of 2019?”.
We wanted to see what type of research they would bring to the table
that could support a move like this of nearly 200% from current levels. We wanted to hear what they thought it would
take for a move like this to happen and if they could support their conclusions
with factual conjecture.
Now we ask you to review these findings and ask yourself the
same question. What would it take for
Gold to rally above $3750 (over 200% from current levels) and why do you
believe it is possible?
Our research team came to two primary conclusions in support
of a Gold price move above $3750 :
A) The US
Presidential election cycle/political environment could prompt a vicious global
economic contraction cycle of fear and protectionist consumer and corporate
activity that propels the global economy into a deflationary (mini-crisis)
event.
B) The global trade
wars could complicated item A (the US Presidential election cycle) and create
an accelerating component to this global political event. The result is the mini-crisis could turn into
“
a bit more” than a mini-crisis if the global trade wars prompt further economic
contraction and disrupt global economic activities further.
Our research team suggested the following as key elements to
watch out for in terms of “setting up the perfect storm” in the global markets.
A) The US Dollar falls
below $94 and continues to push a bit lower.
This would show signs that the US Dollar is losing strength around the
world
B) The Transportation
Index falls below $4350 and begins a bigger breakdown in price trend –
targeting the $3000 level. This would indicate
that global trade and transportation is collapsing back to 2007-08 levels.
C) Oil collapses below
$45 would be a certain sign that global Oil demand has completely collapsed and
the sub-$40 level would very quickly come into perspective as a target.
D) Global Financial
stability is threatened by Debt/Credit issues while any of the above are taking
place. Should any of the A, B or C items
begin to take form over the next few weeks or months while some type of
extended debt or credit crisis event is unfolding, it would add a tremendous
increase of fear into the metals markets.
Our researchers believe the US Dollar is safe above the $91
level throughout the end of 2019 and that any downside risk to the US Dollar
would come in brief price rotations as deflationary aspects of the global
economy are identified. In other words, at this time, we don’t believe the US
Dollar will come under any severe downside pricing pressures throughout the end
of 2019. We do believe a downside price
move in the US Dollar may be setting up between now and early July 2019, but we
strongly believe the $91 to $93 level is strong support for the long term.
The Gold Spot price / the US Dollar price chart highlights
the incredible upside price move in Gold after 2001-02. It was almost a perfect storm of events that
took place after this time to prompt a move like this to the upside. Not only did we have multiple US based
economic crisis events, we also had a series of global economic “shifts” taking
place where capital and assets were migrating all across the globe searching
for superior returns. Could this happen
again?? Of course it could. Although, we believe the next move in
precious metals will be met with a completely different set of circumstances – very
likely targeting foreign nations and not the US economy.
This SPDR GLD chart shows a moderately safer play for investors and traders. The potential for a 20%+ upside price move over the next 60+ days is quite likely and our belief is that traders should be able to trade GLD throughout many of the upside and downside price rotations over the next few weeks and months. Ultimately, if you are skilled enough to pick proper entries, a decent trader could focus on GLD and pick up 65% to 120% ROI over a 7 to 12 month span of time.
– Our Last Gold Forecast From October 2018 Unfolding Perfectly –
Pay attention to where the opportunities are for your level of skill and capital. As we’ve been saying for many months, 2019 and 2020 will be fantastic years for active traders. Stick with what you can execute and trade well because there will be dozens of trades available to most traders over the next 16+ months.
Overall, our research team believes that precious metals have
just begun to move higher on a WAVE C impulse move. We authored a research post suggesting that
Gold and Silver were currently 20 to 30% undervalued back in late May
2019. The current upside move in Gold
and Silver may be just the beginning of a much bigger move.
Ideally, we believe this initial impulse move will end above $1650. From these current levels, that reflects a 25% to 30% upside move in GLD. If any of the fear-inducing items, listed above, begin to take shape over the next 12+ months, we could certainly see Gold above $2100 before too long. $3750 may seem like “shooting for the stars”, but all it takes is a combination of fear and deflation/inflation to drive investors into a gold-hoarding mode just like we saw after 2003-2004 – and that move prompted a 500% price rally from the $300 base level. That same move today would put the current price of Gold near $7800. It might seem like it could never happen – but it could.
Bottom line, we forecast the markets and share some extreme analysis like this to open your eyes to some potential opportunities. But, you cannot just jump into gold or miners after reading this and think you are set for success. The markets are never that simple. You must actively adjust and trade with the market and our daily video analysis is what will keep you on the right side of the market more times than not. This week, we locked in some profits on our long gold ETF, and gold miners ETF, why? because our analysis says both of these are at resistance and could pullback before heading higher. We don’t buy, hope and hold, we enter positions, lock-in profits, rinse, and repeat over and over again.
Get my daily video analysis and trade alerts today by subscribing to the Wealth Building Newsletter.
Chris Vermeulen
www.TheTechnicalTraders.com
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