Why I Am Bullish Gold

From a high in August/September 2011, gold started a 52 month correction. The bottom was in December 2015.

A symmetrical 52 months ties to April 2020. Gold struck a major low in the spring of 2020 (March) and advanced to all time new highs.

I think it conspicuously bullish that gold overbalanced the duration of the bear market in hitting new highs after this 52 month time frame.

It is one of the reasons why I concluded that the record high set in August 2020 was not a false breakout above the 2011 high of 1920.

Rather the indication is that after hitting record highs last summer, gold pulled back, carving out a Bull Flag in the process.

The following weekly gold shows that gold broke out of this Bull Flag on Monday.

In so doing, it reclaimed the 1920 level of lore from 2011… the bull market peak that year.

In the aftermath of its 1046 December 2015 low, gold installed a huge inverse Head & Shoulders. Gold broke out above the Neckline of the inverse H&S in June 2019.

In the aftermath, it satisfied and EXCEEDED its inverse Head & Shoulders projection to around 1700. It exceeded 1700 with authority, a bullish development.

Notably, the correction since last August record high has seen gold pull back to the 1700 “handle” but holding squarely above the 1700 H&S projection.

We've been hammering the table throughout November and December that gold should be putting in a low. This at a time when the vast majority of market participants turned sour on precious metals as evidenced by the fact that sentiment in November was as bad as it was at the March low in gold and silver — despite the metals being at much loftier levels. Bullish.

One of the reasons I remained bullish is that December 2020 is 18 months from the June 2019 breakout. Long time readers know the significance of 18 months. Allow me to explain.

Markets are geometrical and play out in 90 degree decrements. Even the legendary fundamentalist Sir John Templeton stated as much.

Nowhere in the legendary W.D. Gann's writings do I recall him talking about “cubes.” He always talks about “squares.” Well, a true square is a 3 dimensional cube of 6 sides.

These 6 sides create 6 angles of 90 degrees. 90 degrees X 6 = 540 degrees. 540 degrees/days is 18 months (360 days or 1 year + another 180 degrees or 6 months).

I only discovered this when researching a DVD course I did called Unlocking the Profits Of the New Swing Chart Method which tracks every major turn in the SPX from 1941. I was amazed to see how many moves of 540 degrees in PRICE & TIME occurred.

It was this that led to my realization that a true square or square-out is 540 degrees. Students who got my Square of 9 Wheel learn how this applies to major swings this century.

That Gann did not use the word “cube” in his writings underpinned its significance as Gann was very cryptic.

The bottom line is gold bottomed and turned up sharply following this 18 month 540 degree period from the June 2019 impulse.

As well, 1046 (the major Dec 2015 bear market low) is square early December (which ties to the November 30 low).

Anchoring the 1046 on my Square of 9 gives the following projections: Clearing 1966 opens the door to 2147. Clearing 2147 points to 2337.

However, my expectation is that gold could go many fold higher than that over coming years.

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