June 9, 2020
1. Gold often has a “bad hair day” on Tuesdays, but today (so far) the price action is decent.
2. Is the sideways drift in the gold price coming to an end, or is there more churning ahead as the summer begins?
3. What can be said is that a rough $100/ounce sale is in play for gold, and there are 15%-20% price sales for most intermediate and senior miners.
4. Please click here now. Double-click to enlarge this dollar versus yen chart. There is tremendous correlation between the price action of gold and the yen.
5. That’s because big bank FOREX traders view them both as “risk-off” currencies. At some point that correlation will die, but for now it is rock solid.
6. There’s a loose triangle in play for the dollar against the yen, and a meltdown seems likely. That would be good news for gold!
7. My suggested plan of action for gold market investors is to buy lightly here, because regardless of whether the economy strengthens or weakens, debt goes higher.
8. It’s outrageous that during periods of economic strength, Western governments and central banks add debt, print money, and refuse to eliminate QE.
9. The great news is that those outrageous actions are why gold now drifts sideways after big rallies rather than selling off aggressively.
10. Please click here now. Double-click to enlarge. This weekly chart for gold is spectacular.
11. There’s a gargantuan inverse bull continuation pattern in play, and it’s arguably the most aesthetic pattern… in the history of markets!
12. Interestingly, the formation of a bull flag now is as likely as a big right shoulder.
13. What about the stock market? Well, the current action in the stock market is also good for gold. To understand why that’s true, please click here now. Double-click to enlarge.
14. A huge broadening formation is in play for the US stock market, and broadening formations happen when a market becomes… out of control.
15. Interestingly, a recent poll highlighted by Fox News suggests that 80% of Americans believe not just the stock market, but the entire nation, is out of control.
16. It could be argued that my Dow 21,700 and 18,300 buy points are two of the greatest stock market calls of all time, but I’m not seeking accolades. The market could of course crash at any time, but it is likely to rise to 35,000 or even 40,000 first… and become even more out of control.
17. From the 35,000-40,000 area, I’m predicting another debt-driven meltdown is coming, one that will dwarf the Corona-oriented crash. The bottom line:
18. Out of control nations and markets… are good for gold!
19. Please click here now. Double-click to enlarge this GDX chart.
20. After rising more than 100% in just a few short months, GDX is taking a well-deserved break.
21. I’ve highlighted $37 GDX as a key resistance zone, and the price action since the miners have arrived there suggests mild consolidation is much more likely than a deep correction.
22. Please click here now. Double-click to enlarge this superb SIL silver stocks ETF chart.
23. Like GDX, SIL has rallied from about $16 to $38, but GDX has corrected by about 18% to the $31 area, while SIL has only pulled back to about $33!
24. The resilience of silver stocks after this huge rally is impressive. All silver stock enthusiasts should be buyers into the pullback, in anticipation of a much bigger rally to come, once the $38 marker for SIL is taken out on the upside!
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