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AG Thorson

Trading gold can be terrifying, especially if you don’t understand cycles.

Finding the natural cycle of something is liberating, it bestows the gift of timing.

When I say the gift of timing, I mean knowing the suitable time to buy (when cycles are bottoming) or sell (when cycles are topping) any asset. Currently, the 6-month cycle in gold, that bottomed last November, has reached its final topping phase. It’s at this time we see a pickup in volatility and emotions run high.

Tricky Tops

As we approach the top, one strategy manipulators like to deploy is to run prices to marginal new highs. That triggers breakout buying and allows the manipulators’ adequate volume to offload their positions. Prices reverse a day or two later, leaving the poor and naive retail traders holding the bag.

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Current Setup

I suspect gold will put in its official cycle peak sometime next week, likely within a day (+ or -) of next Wednesday’s Fed announcement (if gold didn’t already top at $1704). Remember, picking the exact top is a fool’s errand, don’t be cute. Prices met our March target between $1685 – $1730; it’s time to take profits and wait for the next opportunity.

The Next Buying Opportunity

If the cycles continue unabated, we should get a multi-week correction in precious metals lasting anywhere from 6 to 10-weeks. How deep prices correct depends on several unknowable factors – like is this a global recession, have interest rates stabilized, new government stimulus programs, etc.

Whatever the case, we think gold is in the 2nd inning of a 9-inning ball game. The party is just getting started. Anyone looking to accumulate physical metals should consider platinum and silver before gold as they are insanely undervalued.

If you have a few minutes, you may want to read my article explaining why physical demand for precious metals could skyrocket in 2020.

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 https://goldpredict.com/

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