Is Gold Poised For A Katie Bar the Door Move?

“In the history of mankind, only gold has been considered pure wealth. It is wealth standing on its own, minus the weakness and stupidity of mankind. Gold affords protection against the ignorance of mankind.” – Richard Russell

“I’ve offered the thought that the U.S. could unilaterally re-set the price of gold to a much higher number and overnight re-liquefy the system and minimize the pressure of our enormous debt. The price of gold has been re-set twice before by the US. So why not now? Yet nobody in D.C. has broached this idea. Why?

Then the full horror of the situation struck me. The reason raising the price of gold isn’t discussed is that we probably haven’t got the gold.” – Richard Russell

Gold bulls are a nervous lot. This is because higher gold discredits Central Bankers schemes.

From my perch, it seems like the vast majority of those long of gold and gold miners are looking to sell as gold approaches its all-time high around 1921.

The vast majority of questions I get are where should we sell the miners?

Fortunately, our subscribers have been long many miners.

They were also well prepared for Thursday’s explosion higher given the daily GDXJ chart I did Wednesday night for Thursday’s morning report, shown again below.

While most players appear to be focused on where to sell gold, it is a good time to take a look at W.D. Gann’s thinking.

“When a stock or commodity advances into new territory or to prices which it has not reached for months or years. It shows that the force or driving power is working in that direction. It is the same principle as any other force which has been restrained and breaks out. Water may be held back by a dam, but if it breaks through the dam, you would know that it would continue downward until it reached another dam, or some obstruction or resistance which would stop it. Therefore, it is very important to watch old levels of stocks and commodities. The longer the time that elapses between the breaking into new territory, the greater the move you can expect because the accumulative energy over a long period naturally will produce a larger movement that it only accumulated during a short period of time.” – W.D. Gann

A long term monthly chart of gold shows it bottomed in late 2015 and has been working on the right side of what looks like a large Cup of a Cup & Handle pattern.

The March pullback held right where it should have… at a backtest of a Neckline

This may be the Handle to the presumed monthly Cup and Handle pattern.

It must be said that following a saucer bottom gold broke out 20 years ago which led to a more than 7 fold increase from 252 to 1921.

20 years prior to the March 2020 shakeout saw a successful test in 2000.

20 years prior to that saw a major top in March 1980 with the Hunt Brothers debacle.

So March was set to be a turning point and it looks like it was a shakeout low based on the way gold rebounded from well-defined support.

One year ago gold and the precious metal markets accelerated at the end of May, so we're coming up on a confluence of cycles at a time when most players

Seems to be looking for a high.

The ingredients for a Katie Bar the Door move are on the table.