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OPINION
GoldEagle/Clive Maund
“On gold’s latest 13-year chart we can see that the giant Bowl pattern has already driven a breakout to new highs in recent months and in this context the minor reaction of recent weeks is a perfectly normal development that unwinds the overbought condition somewhat and rebalances sentiment. The Bowl pattern can also be described as a Cup, and very often a “Handle” forms to complement the Cup before further significant gains are made, which is a period of consolidation that proportion suggests could last a year or two. Should such a Handle now form it would clearly be a source of major annoyance and frustration to investors in the sector as it would mean their holdings would generally go nowhere for a year or two. However, things are deteriorating at such a rapid rate that it is considered most unlikely that gold would get bogged down in this manner. The ongoing exponential rise in money creation to support a collapsing economy that has been made worse by the virus hysteria and disproportionate reaction of governments around the world means that the purchasing power of fiat most everywhere will decline at an accelerating rate, and since gold is “real money” that holds its value no matter what, it must therefore gain in price to compensate. What could therefore happen instead is that, rather than meander around for ages making a Handle, the steeply rising Bowl boundary generates a dramatic slingshot move higher in gold, which the current setup certainly makes possible, especially as it has just broken out to new highs.”
USAGOLD note: The latest from Clive Maund who says “If gold does react back as shown on the chart [to the $1850 level] it will be viewed as presenting a “back up the truck” buying opportunity. The bullishly aligned moving averages and strong Accumulation line certainly bode well for the medium and long-term.”
Chart courtesy of Clive Maund Technical Analysis
Repost from 10-19-2020
The post Gold market update – one last dip likely … then a major upleg to new highs first appeared on Today’s top gold news and opinion.