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AG Thorson
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Gold

After bottoming in March, gold is dropping into its first 40-day low. Prices should stabilize in the coming days and start the next leg higher in May. Overall, we see gold retesting $2000 by July or August.

The price action in metals and miners is often tumultuous surrounding a Fed announcement. Gold initially reacted higher on Wednesday only to slip to fresh lows the following day. Our cycle work supports a bottom any day now and renewed uptrend starting in May.

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THE 40-DAY CYCLE IN GOLD:  In the chart below, you will see how gold switched from making cycle highs every 40-days (downtrend) to making cycle lows (uptrend) at the March bottom. Today marks the 38th trading day since the March low, and we should be nearing the next base. We expect gold to break above $1800 by mid-May and ultimately retest the $2000 level by July or August.

GOLD MINERS CONFIRMING: The gold mining ETF GDX has also adhered to a similar 40-day cycle. Thursday marked day 40, and a low is possible (miners often lead gold). Overall, we view this as a natural correction in a growing uptrend. Our Premium Metals Portfolio is long quality gold stocks and continues to accumulate on pullbacks.

The Gold Cycle Indicator finished at four (4). We remain within cycle bottoming and the beginning phases of an emerging uptrend.

In summary, it is not too late to position for the next leg higher in metals and miners – the current uptrend is just beginning, in our opinion.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

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