We ‘went walkabout’ over the past several years, largely deserting the Precious Metals sector for other greener pastures, because it has been performing so poorly, apart from a dramatic flurry during the 1st half of last year. However, the latest charts suggest that a major bullmarket is incubating in the sector and that it won’t be much longer before it starts. This being so it is time for us to return to take positions ahead of its commencement. We will now proceed to look at the latest long-term charts for gold, silver, Precious Metals stocks and also the dollar to identify the signs of the impending major bullmarket in gold and silver. On the 8-year chart for gold it is now becoming apparent that a large Head-and-Shoulders bottom is completing, that started to form way back in 2013, so this is a big base pattern that should lead to a major bullmarket, and given what is set to go down in the debt and derivatives markets it should easily exceed earlier highs. With the benefit of this long-term chart we can also put the sizeable runup during the 1st half of last year into context – it was the advance to complete the ‘Head’ of the Head-and-Shoulders bottom. This being so we can also readily understand why it then gave back about half of these gains – it dropped back to mark out the Right Shoulder of the pattern, and the good news is that with this late stage of the pattern now approaching completion, we can look forward to more serious gains soon. The new bullmarket will be inaugurated by the price rising above the 1st zone of resistance shown, although it will then have to contend with another major zone of resistance in the $1550 area. However, if the credit markets are coming apart at this time, this shouldn’t prove to be much of an obstacle.
This post was published at Clive Maund on June 03, 2017.
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