• 314 days Will The ECB Continue To Hike Rates?
  • 314 days Forbes: Aramco Remains Largest Company In The Middle East
  • 316 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 716 days Could Crypto Overtake Traditional Investment?
  • 721 days Americans Still Quitting Jobs At Record Pace
  • 723 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 726 days Is The Dollar Too Strong?
  • 726 days Big Tech Disappoints Investors on Earnings Calls
  • 727 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 729 days China Is Quietly Trying To Distance Itself From Russia
  • 729 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 733 days Crypto Investors Won Big In 2021
  • 733 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 734 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 736 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 737 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 740 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 741 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 741 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 743 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

ZAR Gold Price Signals A September 2001-Type Event In The Financial Markets

The gold price in South African Rand (ZAR) is often a leading indicator for a USD gold price rally, as well as major trouble in the financial markets. A good example of this was around August/September 2001, just before the September 2001 crash (which turned out to be a major turning point in the markets - not just for the events of September 11).

Below is a comparison of the ZAR gold chart and the USD gold chart (all charts generated at tradingview.com):

USD/ZAR:XAU/USD Chart 1
Larger Image

On both charts, I have drawn a resistance line (blue) from just after the important 1980 highs. The ZAR gold price managed to go higher than the resistance line by about August 2001 - just before the September 2001 events). From there, it went on a very strong rally.

The USD gold price went higher than its equivalent (or similar) line, about 8 months later, and continued to to rise. The ZAR gold price was a very good leading indicator of the market crash, as well as the USD gold rally.

The red and green line; therefore, represent important turning points for gold in ZAR and USD, respectively. Since then, both charts have gone higher at a steeper angle - see the following chart:

USD/ZAR:XAU/USD Chart 2
Larger Image

On both charts, I have indicated where the major turning points are, as well as drawn a new upper resistance line from the first peak after the turning point (steeper angle than the previous lines). Notice how the ZAR gold price has already passed the 2011 highs. Based on past behaviour, this almost guarantees that the USD gold price will pass its 2011 high (very soon).

Furthermore, the ZAR gold price has already touched the resistance line. If the USD gold price was today at its resistance line, it would be at $2 750. The USD gold price will move much faster over the coming months, in order to catch up with the ZAR gold price - this is consistent with a collapse of the USD Index.

Below is a ZAR gold price chart with fractals that indicate that price could move higher than the resistance line over the coming months:

USD/ZAR:XAU/USD Chart 3
Larger Image

On the chart, I have marked the two fractals (1 to 4). The fractals exist in similar conditions, relative to the key market points (USD silver peaks, Dow peaks and USD Index peaks) indicated. The price is very close to breaking the line, with current support at the R16 000 level.

When this happens, it signals the soon coming major pain in the financial markets, as well as the mania-phase in the gold market.

Warm regards,

 


For more of this kind of fractal analysis, you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.

 

Back to homepage

Leave a comment

Leave a comment