Our subscription service provides detailed technical analysis of where the price of gold, silver and precious metal stocks are going short term (in the next week or two), intermediate term (within the next 3-6 months) and long term (the ultimate top) in each stage of their respective bull runs. This service comes with detailed charting based on conventional technical analysis and our proprietary fractal analysis based on the ’70s. Below are some of our latest comments and rationale for expected price movements in gold without illustative charts which are only available to subscribers. Words: 1000
So says Goldrunner (www.GoldrunnerFractalAnalysis.com) in edited excerpts from his most recent newsletter to subscribers posted here with permission.
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
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Below are snippets of what Goldrunner had to say in a recent mailing to subscribers (go here to subscribe and receive their unique analyses with one-of-a-kind charting).
Gold has little resistance above $1,800, except for the old top high around $1,920 and weaker angled resistance lines above that, thus we would expect gold to “chop higher” from around $2,050 up to the top of the log channel around $2,400 before a break-out above that line which would see Gold go into parabolic “free-rise.”
1. On the weekly chart Gold has bottomed at the RSI 50 line like so many times over the last few years.
2. On the daily chart we can see that Gold retraced the first rise off of the bottom down to the 61.8 fib line and rebounded sharply off of that bottom. We still expect Gold to move back to, and through, the recent highs fairly quickly.
We are left with a cup formation that measures from $1,525 up to $1,800- a $275 cup height thus, a break-out of that cup would target gold around $2,075 on the next run upward. My target has been to $2,050 for the next run. We don’t expect the correction at that point to be too steep or too long in terms of time, though traders will always come in to sell.
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3. On the daily chart the recent correction in Gold did not make it all the way down to test the top blue fan-line which is a bullish sign. We can see that good volume came in on this bottom and subsequent sharp rebound – bullish.
- We can see the exponential moving averages starting to align with each other. A further rise by Gold will see all of the EMA lines turn up together.
- The Stochastic indicator moving above 80 for 3 or 4 days will cause the ADX line to turn up, supporting the MACD which has already turned up to signal a momentum move upward as it did when Gold ran up to $1,800.
- The sharp rise above the 50 line by the Daily RSI indicates big-time strength, just like it did at the start of the sharp run higher back in early July of 2011.
4. On the weekly chart we can see that:
- the RSI bottomed at the 50 line in bullish form at the RSI channel bottom,
- the price rose last week in a bullish engulfing pattern taking out the red candlestick of the week before, much like the bottom in early July, 2011,
- the weekly volume bar rose sharply as Gold reversed higher to form a break-out in volume with the bullish engulfing pattern, thus supporting and confirming the price rise and
- the failure of price to correct all the way back down to the top blue fan-line is a sign of strength/ outperformance.
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5. On the weekly log chart of angled support and resistance lines we show that:
- we expect Gold to rise back up to the recent highs faster than it corrected due to the strong fundamentals at hand. In fact,
- we expect Gold to rise a bit higher than the recent highs, initially, then to correct a bit before breaking up to around $2,050; probably before year-end.
6. On the weekly chart of Gold showing the Keltner Channel in black we can see that:
- Gold has consistently bottomed at the middle Keltner line on the Gold Bull moves from 2009 up into late mid-2011. This bottom at the middle Keltner line is therefore Bullish.
The recent move up to $1,800 hit the top Keltner envelope and turned it up. The next move up generally sees price move up through the top Keltner envelope as Gold moves higher. As the top Keltner line starts to roll upward, the price rises in Gold tend to accelerate to the upside.
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7. The long-term weekly chart of Gold is still very bullish.
Our “Mother of All Cups Chart” shows that this recent rise and correction in Gold still fits with an accelerated rise going into 2013 like Gold did in 1979. The next resistance line lies up around $2,025. A move up, and break through, that line would coincide with the top of the log channel for this current Gold Bull- a bit above $2,400.
A parabolic move in Gold like in 1979 that would break out of the log channel would likely pass through a big air gap on the chart all the way up to a level that would coincide with a “double of the log channel” as we saw back in 1979. We have previously put that potential parabolic target up around $3,900 at a fib level yet our latest analysis suggests that it would come in higher, up around Alf’s price targets ($4,500). I think the fundamentals support such a move as we saw in the late fractal 70’s into 2013.
8. On the final weekly chart is a moving average ribbon chart of Gold which shows that Gold bottomed at the top of the moving average ribbon. Gold not dropping into the MA ribbon means that there is no weekly moving average resistance that Gold must push through on the way back up to the recent highs to cause loss of price momentum. Thus, Gold is stronger in this way than Silver is at this time. We’d expect Gold to run back up to the angled resistance line that is higher than the recent highs, correct a bit at a high level, and then move to the old highs at $1,920 and higher.
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
The upside potential following this correction still looks huge for Gold and for Silver. We expect Gold and Silver to soon make a run back up to the recent highs – but at a sharper angle than they fell. [Let me explain why this will likely be the case.] Words: 528
My Fractal Gold chart work is a direct comparison of Gold, today, to the late 70’s Gold Parabola. Thus, “timing” is taken directly from the late 70’s cycle, with price targets created from a combination of the late 70’s Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull and we still stand by that forecast. Let me explain where we are at this point in time.
Personally, based on the fundamentals at hand and the fact that Gold doubled its log channel around this point in the cycle; I expect Silver to bust up out of its log channel in 2013. Initially, I look for Silver to reach the $60 to $68 level, first and hold open the possibility for Silver to do much more on the upside as the 70’s Silver Chart reflects.
Jim Sinclair’s comment- “This line is no line in sand, but rather it is an event horizon that every reader should print out and paste on the wall behind their trading platform. However they will not. In the heat of emotion the gold community will be selling their children to buy gold as it over runs $4500.”
1) Yet, VALUE is different things in different parts of the long-term cycle.
2) This is because VALUE IS “SEEN” IN DIFFERENT ASSET CLASSES at different points in the cycle depending on how money printing and interest rates affect different parts of the economy.
Some person once said somemthing like, “Shoot for the Moon, and if you miss, grab a star on your way down.” One of the biggest mistakes that I think investors, technical analysists, and chartists make is getting too much tunnel vision in terms of short-term charts, short-term price, and short-term ideas. Jim Sinclair once said that, “To make big money, one must take big risk.” In doing so, he was suggesting that one should take big risk at times, but with a SMALL amount of money- NOT betting the farm. Personally, I think that today is one of those times in the Gold, Silver, and Gold/ Silver Stocks. Of course, the amount of “risk you take” is really only a function of how well you have done your homework, most of the time.
Below, is a chart of Gold with all kinds of lines rising in what appears to be an envelope with the price of Gold generally riding along the top. The lines are “moving averages” that show how the price of Gold is rising “on average” over different periods of time. Only a SuperBull Gold parabolic move in price keeps the price of Gold rising along the top of the moving average envelope like cream floating on top. The price of Gold is almost always moving higher in the SuperGold Bull so we see the moving average envelope constantly rise from the lower left of the chart, up to the upper right.
Just look at Gold’s move, already, though. So many “experts” from banks and brokerages have trotted across the stage on television telling us that “Gold is an old investment relic that pays NO DIVIDENDS!” So what? Gold has risen up over 700% for massive gains since 2001. How many of these $#$$&&^%^&^&^’s have achieved that kind of performance since 2001, besides NONE? Can you imagine the percentage gains if Gold explodes higher to double the log channel in blue from here? Quit watching TV and start thinking for yourself! And, BTW, per the 70’s Gold Bull, a huge move up from here would NOT be the final move up in this Historic Gold Bull.
The Gold Bull grows into a parabolic form on the arithmetic chart, going higher in price per time along the way. Thus each wave higher is “longer in price” while taking less time to play out. The Gold parabolic move is created by the parabolic increase in Dollars being printed.
The 73 week exponential Moving average shown on the chart in red is the kind of simple indicator that can give the long-term investor the confidence to invest/ stay invested in Gold. We can see on the chart that since the inception of the Gold Bull Market down at the “Entry for Gold Bull” label, Gold has only briefly fallen below the RED LINE 2 times.
The concept of “value” is extremely important, especially when Dollars are being printed aggressively. This is because the value of your Dollars is falling. Most people look at a Dollar and see a Dollar. They don’t understand that the worth of a Dollar can fall dramatically in times like today.
Several years, ago, the very savvy Richard Russell stated that the investment times were changing. He said that with huge debts everywhere, cash flow would be the most important issue for everybody going forward- for business, for investment, and for everyday life. He said that it was no longer a game of “Return on Capital”, but a need for “Return of Capital.” What Richard was saying was that good and consistent investment and income gains would be more difficult for a decade, or so, and that just keeping the same value of one’s savings would be an important goal.
The Fractal Gold chart work is a direct comparison of Gold, today, to the late 70’s Gold Parabola. Thus, “timing” is taken directly from the late 70’s cycle, with price targets created from a combination of the late 70’s Gold price and different technical analysis techniques. We developed a price target back in 2006/ 2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull. Anything above that range would mean that the “Stagflation” comparison to the late 70’s was exceeded and “Hyper-inflation” would become a real possibility. Let me explain where we are at this point in time
The “Deflationary” portion of the long-term economic cycle is called Kondratieff Winter. It is characterized by huge debts with a topping economy and stock market. We hit the K-Wave Winter in 1929, and again in the year 2000. The most important factor in how things play out in a K-Winter is the “state of the Dollar.”
Greenspan orchestrated massive asset price inflation in the face of K-Winter Deflation by aggressively printing and devaluing the US Dollar. Many look to see “where the Dollars are going”, but it is the effect of Dollar Devaluation on Price Inflation that is most important. The Dollar Devaluation will grossly devalue the debts while driving key asset prices like Gold sharply, higher.
This period of the long-term investing cycle is all about reality versus fantasy, but on several different levels. The system has been turned upside down by using “paper derivatives” that can be expanded to infinity for “price discovery.” Even paper money is a “derivative” since periodically in the long-term cycle, like today, the world must turn to REAL MONEY GOLD to bail out the paper currency system.
Since the Fed has the control of the money, it knows in advance what it will do. Thus, the Fed Banks have very powerful legal inside information and can front-run everything that they do while taking no risk, whatsoever!