Gold Is In Gorilla Mode, Technically Speaking
Summary
The technical picture on the gold chart over a 10-year period is predicting a major upside breakout.
I expect a pullback somewhere between here and $1,900, but then a new massively bullish leg will begin.
This next bull move will coincide with the increasingly worrisome long-term wreckage that governments have now left their economies on fears of COVID-19 infections.
The coming economic deflationary wave is scary, and if you don't have gold, you may not survive it very well, financially speaking.
Technically speaking, gold is in gorilla mode at the moment. It is breaking through trading channels, and the moving averages are diverging to the upside which is extremely bullish.
If we have a pullback, it then forms a cup and handle from 2011 high of $1,900 to 2020. Cup and handle formations are even more bullish, especially over such a long time frame.
Gold is acting as a safe haven for the following fundamental reasons:
- COVID causing severe uncertainty about future economic demand.
- The US economy has deflated, which is beginning to show up big time in commercial real estate.
- This after employment and retail have completely crashed.
- Though the velocity of money is down, inflation is still up, predicting that an increase in money velocity may lead to more extreme dollar devaluation.
- Negative interest rates have put a nail in the coffin of the bond bull market.
- The piper of monster consumer, corporate, and national debt levels now has to be paid.
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