In August, our article Cycles Support A September Buying Opportunity reported the potential for an aggressive cycle decline into the next 6-month low. That collapse is underway and we could see a buying opportunity by late September or early October.

Gold Price Update

Though gold consolidated a bit longer in August than expected, our September/October Target box remains valid. Our updated forecast Gold Nearing Final Peak of Triangle Pattern foresaw last week’s peak and warned of the ensuing collapse.

As a reminder, gold prices tend to form a cycle low roughly every 6-months. Sometimes the cycles are cut short, as we saw with the coronavirus - other times, they extend. The March 6-month low arrived early due to the extreme nature of the decline, and the next low is rapidly approaching. 

Our Gold Cycle Indicator was designed to navigate the 6-month cycle. I will not expect a low until the value drops below 100 (currently 294) and enters minimum cycle bottoming. At a minimum, we believe gold will revisit $1800. 

When the GCI drops below 100, I will begin adding to our Gold Predict Educational Portfolio. I am considering adding silver miners and some energy. I believe the unprecedented gas and oil well shutdowns will create a supply issue next year; higher oil prices could spark the upcoming inflation. 

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information visit here.

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Asset bubbles are a repeating theme. In 2017, bitcoin entered a bubble driving prices from $1000 to $19,000. The recent Bubble in Tesla marked a rally from $70 (post-split price) to over $500 in less than 6-months. Our work supports a bubble in gold and precious metals later this decade. This article will explore the various aspects of a bubble and how one could prepare.

Below are the three ingredients often associated with bubbles.

1. A disruptive force that triggers speculation. 

2. A believable story that gains mass appeal.

3. Widespread adoption and the fear of missing out.

Disruptive Forces

The internet fueled the 1990s Dot.com bubble. Blockchain technology stoked Bitcoin, and the Electric Vehicle (EV) revolution triggered the recent bubble in Tesla. Next, I believe a global currency crisis could trigger a bubble in gold that sends prices to unthinkable levels.  

Governments around the world have made it clear they will continue to print money. Eventually, they will have no choice but to default and restructure their debt. A new monetary system (likely digital) will emerge, and I believe this will be the driving force behind the bubble in gold. 

Velocity of Money

Inflation and supply shortages will only get worse. In the latter phase of the monetary crisis, the velocity of money will increase sharply. Instead of hoarding currency, people will spend their dollars quickly - fearing widespread shortages and higher prices. 

Physical Bullion Coins

Finding quality bullion products could become difficult. Partly because of resource shortages but more likely because of a demand shock. What is a demand shock? That is when a rapid influx in demand overwhelms supply for months or even years. Any supply that hits the market is quickly gobbled up - no matter how high the price. We are seeing some of this now. 

I prefer government minted coins over bars or rounds. Why? They are recognizable and harder to counterfeit. There will likely be numerous fake coins and bars circulating near the end of the bubble - you will want to have something dealers and individuals recognize and trust. 

When to Sell

Timing the exact top of a bubble is difficult. Towards the end, prices will often double in a month or less. People who have never bought gold or silver will be panicking to get some (fear of missing out). You will overhear conversations in the grocery store about a mining stock or a new “gold-backed” cryptocurrency…that is when you know we are getting close. I spotted the final bubble...