Queen Gold Digests A $2000 Fiat Meal

President of Graceland Investment Management
August 25, 2020

The “KISS (Keep it simple, superstar!)” investing principle is important, especially in the gold market.

Business owners and stakeholders don’t have a lot of time to be deciphering candlesticks on a gold chart, but there are some easy rules of thumb that can help.

The “Queen Gold” December futures chart. When candlesticks have both “wicks” and “tails”, a period of indecision is likely in play.

Candlesticks with long wicks are generally negative, and long tails are generally positive.

When using a classic “Edwards & Magee” bar chart, the minor highs and lows are a very important aspect of the chart to consider.

If the market is making higher highs and higher lows, that’s an uptrend. Currently, gold is drifting. The next positive event would be to see the price above the minor high at $2025.

A negative event would be seeing the price drift under the minor low at $1875.

Rather than going blue in the face trying to predict the next minor trend action, investors should let the market prove itself. Let the market define the next uptrend or downtrend.

Once patience is mastered, it’s exciting to watch the minor highs and lows form on the daily gold, silver, and mining stock charts!

The US stock market chart. From my Dow 18,300 giant buy zone, the QQQ ETF has staged a wondrous pattern of higher highs and lows, and until that pattern ends, investors can stay long… and strong!

The GDX chart. The summer doldrums are in play for gold stocks. For the past four trading days, GDX has been trading in roughly just a one-dollar price range.

There may be a higher low coming into play, but Tuesdays are often a rough day for gold investors. My suggestion is not to get excited until the minor high at $44 is penetrated.

If the low at $39 fails, a deeper reaction would offer value-oriented investors an opportunity to buy, while momentum enthusiasts should wait for $44+ before going into action.

Some US gold bugs may have wasted time focusing on the US election rather than the buy zones (major and minor) in the stock and gold markets. Politicians won’t make investors richer, but professional patience-oriented tactics will!

As far as I’m concerned, the US election is already over, and more debt is the winner. Everything else is a side show. A 2021-2025 war cycle is also possible, and arguably likely. It could be both internal and external.

Investors need to own physical gold and silver to hedge against this potential war cycle… and against the disgusting debt worship showcased by almost all the world’s politicians.

The SIL silver stocks ETF chart. Gold $2000 (and silver $30 and SIL $50) is a round number where “digestion” of gains can be expected.

Silver stock enthusiasts should watch for a push to $51 on the SIL chart to potentially begin a fresh uptrend for the silver miners, both senior and junior!

From a fundamental standpoint, the Corona crisis debt is likely factored into the current gold price. A new catalyst is needed to fuel the next major leg higher.

It’s likely to be extreme civil unrest in America and elsewhere, but it could just be a Fed that reduces its support for government bonds and the stock market. It could be infrastructure spending that pushes the debt load up more than is expected.

Ominously, it could be the arrival of inflation at a time when the government can’t service its debt load if interest rates rise. If significant inflation appears and the Fed refuses to raise rates, gold stocks could garner immense institutional interest.

Regardless, more digestion without the emergence of a fresh debt-oriented catalyst will probably see the gold price trade under $1875. An end to it will see a nice rally over $2025 and perhaps to as high as $2300 in the medium term.

The GDXJ chart. It’s unknown whether silver and key mining stock ETFs will start making higher highs before gold does.

My 14,7,7 Stochastics series oscillator is not on a fresh buy signal yet, the price action looks “soft”, and no fresh minor trend highs or debt catalysts are in play, so further consolidation looks to be the most likely short to medium term scenario. The good news is that no investor needs to be nervous. Fresh highs are coming, and when they arrive, gold bug portfolios will come alive and thrive!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my “Make 100% With A Range Trade!” free report. I highlight key junior miners that investors can buy during the consolidation, and still make 100% gains even before the next rally begins!

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.

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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.

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