Gold And Silver Set To Soar As Bank Accounts And Crypto Wallets Come Under Threat…

Technical Analyst & Author
February 22, 2022

A big additional driver for investing in gold and silver has become apparent just in recent days with it becoming clear that governments around the world, starting with Canada, are not above plundering bank accounts and online crypto wallets of anyone they consider to be renegade or even to be holding or expressing views that are not in complete conformity with government policies and agendas. The realization that this is set to happen is already translating into sharp gains in the Precious Metals sector which looks set to continue and accelerate.

Of course, the most secure form of investment at this time is physical gold and silver, but if they advance then so will gold and silver stocks and we are seeing large gold stocks that pay good dividends such as Barrick Gold and Newmont Corp starting to take off higher on strong volume in a manner which suggests that they will not be giving back their gains.

We’ll start by looking at the big picture using Larry’s long-term chart which shows that gold has been moving within a gigantic Bowl or Cup pattern following its correction back from its 2011 highs. Whilst it may be initially disconcerting to see it failing to gain traction over the past year or two when it contacted the Bowl support lines we should take into consideration that the rate of rise in 2019 and 2020 had become steep which is a reason why a “Handle” often forms to complement the Cup which serves to unwind the overbought condition resulting from the steep rise, and that is what the long consolidation from the 2020 high appears to be. Another point is that even though the price may seem to be breaking down from the Cup by moving sideways through its boundary, this is normal if a Handle forms and is not bearish – on the contrary it creates the technical setup for bigger gains. The big question then is “Will gold continue to move sideways to make a larger Handle or not?” It doesn’t look likely. Given what is now going on with mounting inflation, the prospect of war in eastern Europe and a failure of confidence in the banking system etc. it looks like gold should accelerate to the upside from here, possibly dramatically.

 

Chart courtesy of Larry Fike.

 

On gold’s latest 4-year chart we can see that it is already starting to break out from the large triangular consolidation pattern that formed followed its strong uptrend from the middle of 2018 to the middle of 2020. This correction was normal and it has put gold in a very good position to embark on its next major upleg which will be fuelled by a combination of mounting inflation and, as mentioned above, a collapse in confidence in other forms of investment. At the top of this chart we see the continuing strong uptrend in the Accumulation line that is alrwady making new highs, which certainly augurs well for gold gaining strong traction in the months ahead.

As usual, during the earliest stages of a major sector uptrend it is the large-cap high-dividend paying stocks that are the first to forge ahead, a fine example of this being Barrick Gold whose 6-month chart is shown below.

While it may look like we have “missed the boat” with some of these stocks like Barrick and Newmont because on their 6-month charts they are short-term overbought, this is not the case at all, because they are set to go much higher, as becomes obvious when you look at their longer-term charts. Large-cap gold stocks which have yet to move much but look set to include Alamos Gold, AGI, Agnico –Eagle, AEM, Harmony Gold, HMY, Seabridge Gold, SA, and Wheaton Precious Metals, WPM, which is a big silver. The charts of many of these stocks are rather similar to Harmony Gold, whose 2-year chart below serves as an example – as we can see it now looks well placed to break out of its downtrend into a new bullmarket phase.

Later we will be taking an updated look at some smaller PM Stocks that are believed to be at good entry points now.

******

Clive Maund

Clive P. Maund’s interest in markets started when, as an aimless youth searching for direction in his mid-20’s, he inherited some money. Unfortunately it was not enough to live a utopian lifestyle as a playboy or retire very young. Therefore on the advice of his brother, he bought a load of British Petroleum stock, which promptly went up 20% in the space of a few weeks. Clive sold them at the top…which really fired his imagination. The prospect of being able to buy securities and sell them later at a higher price, and make money for doing little or no work was most attractive – and so the quest began, especially as he had been further stoked up by watching from the sidelines with a mixture of fascination and envy as fortunes were made in the roaring gold and silver bull market of the late 70’s.

Clive furthered his education in Technical Analysis or charting by ordering various good books from the US and by applying what he learned at work on an everyday basis. He also obtained the UK Society of Technical Analysts’ Diploma.

The years following 2005 saw the boom phase of the Gold and Silver bull market, until they peaked in late 2011. While there is ongoing debate about whether that was the final high, it is not believed to be because of the continuing global debasement of fiat currency. The bear market since 2011 is viewed as being very similar to the 2-year reaction in the mid-70’s, which was preceded by a powerful advance and was followed by a gigantic parabolic price ramp. Moreover, Precious Metals should come back into their own when the various asset bubbles elsewhere burst, which looks set to happen anytime soon.

Visit Clive at his website: CliveMaund.com


Gold is used in following industries: Jewelry, Financial, Electronics, Computers, Dentistry, Medicine, Awards, Aerospace and Glassmaking.
Top 5 Best Gold IRA Companies

Gold Eagle twitter                Like Gold Eagle on Facebook