Looking out into the medium term future of gold we can find likely points of price weakness using cycle analysis and then pairing that with market geometry we could also spot potential price target zones.
My chart calls out December 2022 as a danger zone!
Obviously a lot can happen between now and then but if the price continues to trade in the same trading channel that it has been following and breaks through the current upper resistance of ~$1920 then we could be in for a decent move up in gold followed by a sell off going into December 2022. The diagonal channel lines of the pitchfork tool have been well respected so I would expect a pull back to land on, or close to one of these lines/levels, I guess it depends on what is the underlying driver of the fall as to how deep the sell off will be. But I do believe some form of sell off is likely, as when you look back at the past 4 bottoms of the time cycle bubbles on the chart they very much line up perfectly with sell offs.
Starting from left to right we can track:
- Cycle bottom 1 sell off in Oct 2008 which was ~34%
- Cycle bottom 2 sell off in May 2012 which broke the top of the 4yr bull run, here the market loss is ~21%
- Cycle bottom 3 sell off in Nov 2015, where the market went sideways for a year after the previous sell off and then eventually broke into a full bear market for a ~41% sell off
- Cycle bottom 4 sell off in May 2019, this was only a small sell off of ~7%. The bigger sell off was a few months before hand and this was likely a shake out before a parabolic move up.
Further to the cycle bottoms if you look at the midpoint of each cycle there are also sell offs very close to the peak as well.
To wrap up I think Gold is a great long trade to be in now as we are seeing inflation popping and equities getting toppy and I'd say we will see a big move up once the current resistance level is broken. But the historical evidence is to strong to ignore so I won't be caught holding any gold positions or stocks in the lead up to December 2022.
**This my personal opinion and I'm not a paid advisor so please DYOR research before investing your cash**
My chart calls out December 2022 as a danger zone!
Obviously a lot can happen between now and then but if the price continues to trade in the same trading channel that it has been following and breaks through the current upper resistance of ~$1920 then we could be in for a decent move up in gold followed by a sell off going into December 2022. The diagonal channel lines of the pitchfork tool have been well respected so I would expect a pull back to land on, or close to one of these lines/levels, I guess it depends on what is the underlying driver of the fall as to how deep the sell off will be. But I do believe some form of sell off is likely, as when you look back at the past 4 bottoms of the time cycle bubbles on the chart they very much line up perfectly with sell offs.
Starting from left to right we can track:
- Cycle bottom 1 sell off in Oct 2008 which was ~34%
- Cycle bottom 2 sell off in May 2012 which broke the top of the 4yr bull run, here the market loss is ~21%
- Cycle bottom 3 sell off in Nov 2015, where the market went sideways for a year after the previous sell off and then eventually broke into a full bear market for a ~41% sell off
- Cycle bottom 4 sell off in May 2019, this was only a small sell off of ~7%. The bigger sell off was a few months before hand and this was likely a shake out before a parabolic move up.
Further to the cycle bottoms if you look at the midpoint of each cycle there are also sell offs very close to the peak as well.
To wrap up I think Gold is a great long trade to be in now as we are seeing inflation popping and equities getting toppy and I'd say we will see a big move up once the current resistance level is broken. But the historical evidence is to strong to ignore so I won't be caught holding any gold positions or stocks in the lead up to December 2022.
**This my personal opinion and I'm not a paid advisor so please DYOR research before investing your cash**