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AG Thorson
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Gold

I am beginning to see investors panic and turn bearish on gold as prices slip below $1750. That tells me we could be approaching a selling climax and an important low. The big picture chart of gold remains decisively bullish and points to higher prices for years to come.

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GOLD BIG PICTURE UPDATE

GOLD MONTHLY TREND CHART: I like to turn to the monthly gold chart for a big picture perspective. Looking at the top indicator, you will see this is the first Monthly Stochastics dip below 80 in a new bull market. We had a similar setup in 2003 when gold dropped to $320, which turned out to be a superb buying opportunity. I believe the same is true now.

The 20-Month Average (pink line above): In bull markets, gold prices should hold above the rising 20-month average (currently $1700). The only exception is when prices dip into an 8-year low (like 2008). Note- The next 8-year low is not due until 2024.

GOLD PRICES AFTER SEPTEMBER 2001: After the initial shock of the 911 attack, gold prices fell back to pre-9/11 levels ($270) a few months later. That turned out to be one heck of an opportunity. I see the same setup now as gold approaches pre-Covid levels.

GOLD NOW: I believe we could be close to a bottom in gold. Prices could spike lower over the coming days if the stock market sells off, but I think that would be temporary. If we look back 5-years from now, I believe we will consider today’s prices an amazing long-term opportunity.

In summary, Covid-19 was a pivotal turning point across the globe. There is a lot more money in circulation but the same amount of gold. Just like there was a brief opportunity to buy gold at pre-911 prices a few months after the event, investors are receiving a similar chance in gold now, in my opinion.

I believe now is the time to be greedy when others are fearful.

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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