• 395 days Could Crypto Overtake Traditional Investment?
  • 400 days Americans Still Quitting Jobs At Record Pace
  • 402 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 405 days Is The Dollar Too Strong?
  • 405 days Big Tech Disappoints Investors on Earnings Calls
  • 406 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 408 days China Is Quietly Trying To Distance Itself From Russia
  • 408 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 412 days Crypto Investors Won Big In 2021
  • 412 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 413 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 415 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 416 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 419 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 420 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 420 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 422 days Are NFTs About To Take Over Gaming?
  • 423 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 426 days What’s Causing Inflation In The United States?
  • 427 days Intel Joins Russian Exodus as Chip Shortage Digs In
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Gold and Gold Stocks Bull Analogs

Over the past two weeks the precious metals complex has retested its Brexit breakout and rebounded back to the July highs. Today's jobs report has pushed the complex lower but has delivered an opportunity to cash heavy portfolios which have missed the bulk of the move. With that said, we wanted to share our current analog charts for Gold, gold stocks and junior gold stocks which suggest continued upside potential in the sector.

The first chart plots the current rebound in Gold compared to the average of its two strongest cyclical rebounds (1976 and 2008) and the average of four rebounds (including 1976 and 2008) within its secular bull markets. As we can see, the current rebound is closely following the average of the four rebounds. If Gold continues to follow that path then it could reach $1500/oz before the end of the year and retest its all time high of $1900/oz by the end of next year.

Gold Bull Analog Daily Chart

Turning to the stocks we find that the large miners are fairly extended at present. The HUI is currently above the other two rebounds. If the HUI continues to follow the path of the last cyclical bull market (2008-2011) then it has somewhat limited upside. However, considering my research and analysis, the recent low in gold stocks figures to be quite a bit more like the 2000 low. By following that path the miners could triple over the next two and a half years.

HUI Bull Analog Daily Chart

My own research and discussions with industry sources (folks with more experience and knowledge than me) leads me to believe the best value is currently in the juniors and the smallest juniors. My junior index bull analog chart shown below confirms that view. My index has already tripled but has plenty of upside potential over the next six months and two years.

TDG Junior Gold Index Bull Analog Chart

Thus far Gold and gold stocks appear to be tracking history quite well. If the bull market continues then these charts should continue to provide some context as to where things could go. History is a very good guide but it is not perfect. No indicator by itself is infallible. In addition to historical analogs we also employ technical analysis, intermarket analysis and various sentiment indicators. We reiterate our view that precious metals are in the early stages of a cyclical bull market that has a chance to turn into a full blown mania. Our views are always subject to change but we remain bullish over the near term.

 


For professional guidance in riding the uptrend in Gold, consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2016.

 

Back to homepage

Leave a comment

Leave a comment