Special Update: Why Gold Is Running Higher
In early May 2019, we forecast a momentous advance in gold would start before the end of that month.
Gold turned on May 30, 2019 followed by 2 consecutive gaps to the top side.
Subscribers participated nicely with calls on GLD and positions in GDXJ and KL, amongst other miners.
That moved triggered a Rule of 4 Breakout — a breakout over a declining 3 point trendline that elicited a sharp rally into the first week of September — a 90 day/degree runup.
In my over 30 year trading career, I have noticed that often times market moves work out in these 90/180/360 proportional divisions of the year.
This has been confirmed in the research for my DVD course released in 2005 called Unlocking the Secret of the New Swing Method, which analyzed the major swings in the SPX starting from 1941.
Since early September, gold has been walking off the big summer rally.
Once again, we have been looking for a strong advance to commence in December.
One factor being that the first week of December is 90 days/degrees from the September 4 peak.
Gold gapped up on December 3rd but remained below its 50 day line until last week.
On Monday, gold pushed above its 50 day m.a. following through with an explosive rally on Tuesday.
As in late May, gold shows two consecutive gaps and has once again triggered a Rule of 4 Breakout.
In so doing, gold cleared the large range reversal bar from December 12th which precipitated a big trend day to a 7 week high.
If the advance off the May low was a Wave 1 followed by a corrective Wave 2 into a December low this points to the possibility of a near vertical Wave 3.
Alternatively, gold could be in a 5th wave to the 1600 + region. We’ll be monitoring this alternative.
Be that as it may, the power behind Tuesday’s breakout is underscored by the Magic of 3 in the markets.
Allow me to explain.
Above I mentioned the Rule of 4 Breakout.
Fast moves often follow Rule of 4 Buy signals.
Additionally, this weeks uptrust follows 3 higher lows (since the November low).
Fast moves often follow 3rd higher lows.
The combination of the two points to the idea of an important move.
However, it must be remembered that gold’s fifth waves often extend, such as in the late 1970’s.
Consequently, there is potential to new all-time highs.
Pointing the way higher is the XAU gold/silver index, which came out with authority from a beautiful Cup & Handle this week.
Pulling back the lens to look at the big picture monthlies shows a potential projection in XAU to a minimum of 138.
From the blast-off in January 2016, XAU rallied exactly 720 degrees (2 full squares or revs of 360 degrees) from 45 to 114 as shown in the square of 9 below.
Green arrow points to 45
Red arrow points to 114 (2 squares or 720 degrees up)
If XAU mirrors the advance from 2016 it projects to at least 138 as 720 degrees up from the correction low at 60.59 is 138.
Conclusion. This weeks explosion in the miners is not unexpected. Subscribers initiated positions in early December in GDXJ, AG, SSRM, WPM and PAAS as well as calls on GLD.
This week's momentum sets the stage for acceleration in 2020.
Why?
On August 15, 1971, Nixon announced the U.S. would no longer officially trade dollars for gold.
2020 is an important Gann 49 years from 1971.
W.D. Gann explained that 7 was the number of time as we have 7 days in the week and that accordingly, and 7 squared is 49.
Gann showed how accelerations often begin in the 49th day from a pivot be it a waterfall decline as in 49 days from the top in 1929 or 1987 or a crescendo higher.
I have seen how the same is true for 49 weeks and months… and years.
2020 is 49 years from 1971.
In 1933, President Franklin Roosevelt issued Executive Order 6102 prohibiting the hording of gold under penalty of $10,000 and/or up to 10 years imprisonment.
It meant that private owners were obliged to take their coins, bars or gold certificates to a bank and exchange them for dollars at the prevailing rate of $20.67 per ounce.
Over the next year, the president then raised his official gold price to $35 per ounce.
Nice.
Effectively, Roosevelt cut 40% off the dollar in a bid to stoke inflation and spur the economy.
2020 sets up as a year of acceleration in the precious metals.
Is it possible Trump is planning such a reset if he wins reelection in 2020 to deal with the debt?
99.999% of traders have never even seen the Square of 9... let alone understand its potential.
Do you dare to be different?
