- What’s next for gold? Please click here now. Click to enlarge. The (potentially massive) rally from the $1885 area low has hit its first sticking point at $1935-$1945.
- The low of the left shoulder of a double-headed inverse H&S bottom is providing the resistance, and two other factors are also weighing on gold at the same time.
- To view one of them, please click here now. The COT report shows heavy commercial selling through August 29, which is the end of the latest reporting period.
- Also, please click here now. Click to enlarge this important ten-year yields chart.
- I urged gold bugs to prepare for Friday’s surge in the yield from the key 4.10% support zone, and the jobs report ensured it was a violent one.
- The surge has done some damage to the large H&S top that has been forming. The bottom line:
- For gold to continue its journey towards my $1980 target zone, yields almost certainly need to re-test and break below that 4.10% barrier.
- Please click here now. Click to enlarge. The first yield chart shows the importance of the 4.10% high in early July. This one shows the additional importance of the March high.
- Clearly, 4.10% commands respect. The good news is that when it finally broke decisively to the downside, gold could rally $100/oz very quickly.
- Also, Tuesday is often a soft day for gold. Given the strength in yields, the commercial selling in the COT report, and technical resistance at $1935-$1945, price softness is likely today and it could persist for the rest of the week.
- The big picture? Please click here now. The American empire is fading and China is rising, but India is likely to overtake China within just a few decades.
- The citizens’ obsession with gold in both nations is likely to create what I call a “gold bull era”. Please click here now. Click to enlarge. In the medium term, China is struggling.
- Please click here now. In America, mainstream media promises that all is well because a small number of stock market investors are happy.
- Based on the CAPE (inflation-adjusted PE) ratio, the US stock market is ridiculously overvalued, yet the Fed’s rate hikes have hurt Main Street citizens more than they’ve hurt the debt and war obsessed government.
- Institutional stock market investors seem to enjoy watching the average citizen get ruined by both inflation and rate hikes.
- The handouts the citizens got during the Corona crisis are gone. The US government’s horrifying scheme to achieve regime change by driving the citizens of Russia into poverty has backfired; the “stagflated” citizens of Europe are praying for a mild winter and US citizens are getting edgy as pump gas begins to move higher again.
- A consistent focus on rates and other key big picture items is critical for investors.
- Please click here now. Click to enlarge. When oil last surged as Russian troops stormed into Ukraine, interest rates were low.
- Of great concern is the fact that the average Western citizen isn’t a saver. They are debtors. That means a surge in the price of oil now would be devastating.
- A huge base pattern is in play with mindboggling upside implications for the price. If a surge happens, the Fed would watch pump gas inflation spill into the rest of the economy, and then begin a new round of hikes.
- At that point, the entire Western world could begin to resemble a super-sized version of America in the 1970s, when rates soared but inflation soared more… and the citizens raced to buy both metal and mines!
- Please click here now. Click to enlarge this GDX chart. There’s a nice inverse H&S bottom pattern in play, and it could become the head of a bigger pattern.
- If the price goes under $28.40 the pattern would be ruined, but it would open the door to the formation of an emotionally painful but highly bullish double bottom pattern. Right now, the ten-year yield support zone of 4.10% is the big fly in the mining stock ointment.
- My suggested tactic to handle that fly is to lock in short-term government T-bills (and time deposits at the bank) now, and prepare for the next mining stocks surge, as Jay issues a “more dovish than expected” statement at the upcoming meet of the FOMC!