Expect Gold To Reach All-time High Within A Year - Here's Why - munKNEE.com
Friday , 30 October 2020

Expect Gold To Reach All-time High Within A Year – Here’s Why

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Both U.S. dollar index (DXY) and gold have been rallying in tandem since last year, which is a rare occurrence due to their normally inverse correlation. @A Financial Site For Sore Eyes & Inquisitive Minds

[As can be seen in the chart below:]

Source: WingCapital Investments

…historically there were only two other periods since 2000 during which:

  1. Gold rallied more than 10% in the past 52 weeks while DXY was also positive @Follow the munKNEE
  2. Both gold and DXY were up 4 out of the last 5 weeks

The instances (2006 & 2010) are highlighted in the above chart, and the forward returns in gold are shown below:

Date Gold 52-Wk Chg DXY 52-Wk Chg Both DXY & GC Up Last 4 / 5 Wks Gold Forward Chg 4-Wk 12-Wk 24-Wk 52-Wk
10/9/2005 469.2 12.06% 89.35 2.60% YES -0.19% 15.03% 24.00% 25.49%
1/22/2006 558.7 31.21% 89.32 7.00% YES 0.02% 13.16% 19.31% 15.36%
1/29/2006 567.4 37.05% 89.89 6.52% YES -0.25% 14.87% 9.20% 13.89%
2/19/2006 558.8 28.49% 90.61 9.62% YES 0.21% 17.52% 13.37% 22.24%
5/9/2010 1,227.40 31.85% 86.09 3.79% YES 0.12% -1.96% 10.57% 21.67%
5/16/2010 1,175.70 22.66% 85.37 6.66% YES 6.93% 3.33% 18.85% 28.33%
5/23/2010 1,212.20 23.85% 86.48 9.15% YES 3.60% 1.24% 12.64% 26.74%
5/30/2010 1,216.20 26.46% 88.23 9.37% YES -0.72% 1.63% 11.18% 26.76%
2/2/2020 1,568.60 16.74% 98.68 2.11% YES
2/9/2020 1,582.70 17.52% 99.12 2.29% YES
2005-2006 Avg -0.05% 15.14% 16.47% 19.24%
2010 Avg 2.48% 1.06% 13.31% 25.88%

The statistical analysis illustrates that when gold and U.S. dollar were up in the long and short-term together during 2006 and 2010, substantial gains in gold were still ahead within a year in both instances. .@Gold&Silver

[Given the above,] while elevated speculative positioning and looming weak seasonality (gold tends to top around end of February and pull back for several months before launching higher again) could mark a short-term top, in the long-run, we expect gold to march towards and reach its all-time highs…

Editor’s Note:  The above excerpts from the original article by WingCapital Investments have been edited ([ ]) and abridged (…) for the sake of clarity and brevity.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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