Gold $4300-$4200: The Key Zone To Buy
Another “traditional” US jobs report week is underway, with gold soft on “Tombstone Tuesday”, and moving towards a key buy zone for all precious metal enthusiasts.
After surging almost 20% in a month and breaking out of the corrective channel marked by dotted lines on this daily chart, gold is staging a classic pullback towards the breakout point.
The $4300-$4200 zone is targeted.
As gold corrects, oil surges… and the target is the highs in the $110-$119 area.
Mainstream media highlights what is supposedly a key relationship between oil, interest rates, and gold.
In a nutshell, their narrative is that gold pays no interest and so a higher price of oil brings Fed rate hikes that are negative for gold.
This long-term US interest rate chart. In the 1970s, the Fed was able to hike rates to the 15% area to slay inflation… and the government could still finance its debts.
Now, even an 8%-10% interest rate could put the government into a state of full default.
Incredibly, the nation’s so-called leaders are ignoring this risk… and so are the gold market narrators.
The bottom line: When interest rate hikes go from push to shove, it’s “Queen Gold” that will shove the fiat-focused government off its cliff of debt. The Fed can afford to “talk hawk” and do little with rates, because inflation (basis the CPI, PPI, and PCE indexes) is only 3%-4%.
If oil surges not just to $110-$119, but to my long-term target zones of $200 and $300, US inflation will skyrocket and the Fed will have no choice but to hike rates into the 8%-10% danger zone… and beyond!
The government will then have to choose between massive spending cuts and printing money. History shows that when faced with default and bankruptcy, governments almost always embrace aggressive fiat currency debasement.
A large inverse H&S pattern is forming on the daily silver chart. The current pullback is forming a right shoulder and that’s in sync with the price action for gold.
President Donnie envisions 20% GDP growth… but the debt could soon grow at an even faster rate.
This is the PDBA agricultural ETF chart. Like gold and silver, agricultural commodities pay no interest… yet they are beginning to skyrocket alongside oil.
This is the sugar market ETF (CANE). A huge inverse H&S pattern is in play, and the right shoulder is a bull wedge.
The bottom line: Massive inflation is coming. Vastly higher rates that threaten the US government’s very existence are coming. The only question is:
Are investors prepared?
A daily focus on the big picture is critical for investors as inflation, tariffs, war, a wildly overvalued stock market, debt ceiling horror, and empire transition dominate the investing landscape. I cover this big picture 5-6 times a week in my flagship Galactic Updates newsletter. At $199/year, investors feel the price is too low, but I’m offering a $179/15mths “special offer” that investors can use to get in on the winning action and meticulous analysis. Click this link to get the offer or send me an email and I’ll get you a direct credit card payment link. Thanks!
What about the miners?
This is the GDX daily chart. While precious metals (gold, silver, platinum, and palladium) can be bought now… the focus for mining stock buyers should be the $4300-$4200 target zone of the current pullback for gold.
That could see GDX trading at about $85.
The ADL (advance/decline line) for the Dow finally collapsed and the Nasdaq, SP500, and the mighty Dow itself are likely to follow.
A well-deserved crash of the outrageously overvalued US stock market could help put GDX into my $85 target zone, which would also complete the formation of the right shoulder of a very bullish inverse H&S pattern. To summarize the current situation:
All gold stock hands need to be on buy-side deck, because what lies ahead likely features 15% rates, $15,000 gold, $1500 GDX, and individual gold stocks reaching bull era valuation heights that make shareholders giddy!
Thanks!
Cheers
St
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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
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Stewart Thomson is president of Graceland Investment Management (Cayman) Ltd. Stewart was a very good English literature student, which helped him develop a unique way of communicating his investment ideas. He developed the “PGEN”, which is a unique capital allocation program. It is designed to allow investors of any size to mimic the action of the banks. Stewart owns GU Trader, which is a unique gold futures/ETF trading service, which closes out all trades by 5pm each day. High net worth individuals around the world follow Stewart on a daily basis. Website: www.gracelandupdates.com.
