All That Glitters When the World Jitters is Probably Gold
Economic pressure and concerns on the world markets have not subsided just because the US Federal Reserve started up the presses. Conversely, the market price level may increase due to a false expectation of a rapid recovery and future expectations, which can be very unrealistic.
In terms of technical analysis, gold has set a very interesting sideways base pattern after breaking recently over a large resistance channel near $ 1720. Our research team anticipates that the recent gold base near $ 1720 to $ 1740 will hit the US stock market high from 2005 to 2007 - just before the 2008 credit crunch hit. We believe in the similarities between current and past events. are strangely similar in price and technical / fundamental data.
An underlying asset / economic class had recently had an amazing bullish rally. This euphoric rally phase started because the US Federal Reserve and global markets had high cash and credit markets - hell, they were all. The "no fear" mentality was wild, as was the market. Suddenly, credit markets seemed to be recovering and interest rates almost doubled or tripled overnight as banks and credit institutions responded to the Fed's rate hikes. At this point, the catalyst for the credit crisis was already in place - similar to today.
SPY - SPDR S & P500 ETF Trust weekly chart
This SPY chart shows the similarities between 2006-08 and now. It may be difficult for you to see on this compressed chart, but the price pattern we have seen in the past 2+ years is very similar to the price pattern that triggered the market high point near October 2007. This time volatility seems to be 3x or 4x as high as 2006/07 - yikes.
Gold-silver price ratio weekly chart
The current level, which relates the gold price to the silver price, is 98.2 - an extremely high historical level. There has never been a time like this in history when gold has reached such a high price ratio compared to silver. It is very likely that gold as a “global hedge against risk” has risen to this current level and that silver as a secondary asset has simply been overlooked. Although the supply of gold and silver has declined in the past more than 6 months due to demand and the COVID-19 virus, we believe that the current price conditions represent a very clear opportunity for qualified technical traders.
Traditionally, the gold to silver ratio is likely to drop below 65 to normalize price differentials. This suggests that silver could rally 2x or 3x over the next more than 12 months and gold would likely rally 60% to 150% from the current level.
Gold futures weekly chart
This weekly gold futures chart shows the Fibonacci expansion rates from similar price ranges before expansion. The first measures the progress of gold from 2001 to 2008 - the high point of the markets in 2008. The second measures the rise in gold from 2015 to the recent high (2020) - the presumed high in the US stock markets
The overlapping Fibonacci expansion levels in this chart paint a very clear picture that gold could try to target certain levels should a much broader upward movement in price begin ...
_ $ 1950 - Important initial target level and could become little resistance.
_ $ 2250 - The next important target level, which is a two-fold expansion over the first price rally in 2008.
_ $ 2731 - This key level would like to become the larger target for 2020. Our research team believes that aligning this level with the current price expansion for gold is a perfect next upward price target.
_ $ 3200 - This upper price target shows a certain meaning - and is still far from the current price level. Still, it is a valid upward price target.
We encourage you to take a moment to read some of our previous research on precious metals and gold.
June 3, 2020: Gold & Silver “Washout” - Get ready for a big step up
May 28, 2020: Lack of physical gold and silver
May 19, 2020: Gold. Silver, miners sway on the verge of an eruption
GLTR Precious Metals ETF Daily Chart
This daily GLTR chart shows the current FLAG formation, the price of which has been set and is about to break out / collapse. Our researchers believe that the apparent upward trend given the current global economic environment and the fact that we are reviewing second quarter data within more than 10 days is likely to shock many investors. Note that our Fibonacci price modeling system UPPER GREEN and LOWER RED trigger levels have moved significantly above and below the current FLAG APEX level. This adaptive p [Reis modeling system tries to track price rotations and ranges while adjusting internal factoring levels to determine the correct trigger and target values. At this point, GLTR must be above $ 85 to trigger a new BULLISH TREND or below $ 77.50 to trigger a new BEARISH TREND.
GLTR precious metal ETF weekly chart
This weekly GLTR chart shows a 100% Fibonacci expansion margin over previous price rally levels. Should the GLTR break up and complete a 100% measured upward movement in the price, the next target level for the GLTR would be USD 94.70 - almost 15.5% higher.
This is an incredible opportunity for qualified technical traders if they understand how the precious metals and mining sectors are heading for a bigger step up. There was rarely a time in history when gold and silver were so depressed in terms of pricing when the global economy and stock markets were so inflated / raised. It can really be the "opportunity of a lifetime".
We believe that the next 15 to 30 days will result in a "breakdown" of gold to close to $ 2,000 to $ 2,100. Silver is likely to rise above $ 25 to $ 26 over the same period. Once the larger silver price burst begins and attempts to normalize to the advanced gold price level, silver will rise much faster than gold prices. We believe this will happen when gold approaches and breaks the $ 2000 price level.
For qualified technical traders, this expanded price movement for precious metals, miners and a variety of other sectors offers a very clear opportunity to plan and conduct some very exciting deals. We had been warning our friends and followers for over 18 months that the end of 2019 and 2020 as a whole would be incredible years for qualified traders. Don't miss the bigger moves - they will unfold in the next 30 to 60 days and will continue well into 2022.
In short, I hope you've learned something useful from this article and I'm not going to come across as a doomsday guy. If this is the start of a double dip it will be huge, if it is the start of a bear market it will be life changing. If you are new to trading, technical analysis, or a long-term passive investor and are concerned about what to do, you can follow my example, both as a swing trader and with my long-term investment signals with simple ETFs at www. Trade TheTechncialTraders.com
In our economic calendar you will find all of today's economic events.
Chief market strategist
Found by Technical Traders Ltd.
This article was originally published on FX Empire
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Daily USD / CAD forecast - US dollar is trying to gain ground before the weekend
Mid-EUR / USD technical analysis for June 19, 2020
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