GOLD’S BIG PICTURE: A BULLISH OUTLOOK
August 28, 2015
By Mary Anne & Pamela Aden
Gold has been volatile. Some feel the lows are behind us, but others disagree.
With gold swinging up and down, this is a good time to stand back and review what the charts are telling us, to get some perspective on the situation…
Chart 1 is our favorite big picture of the gold price. It identifies the cyclical nature of gold since the late 1960s, and how well it’s performed within these cycles since then.
First, note the lows in red. Ever since gold formed its low in 1969 it’s had a low about every seven or eight years. The last eight year low was the November 2008 low during the financial crisis.
Most exciting is the next upcoming eight year low. You can see we’re almost there! Seven years from 2008 would take it to this November, and eight years would take it out to November 2016.
This means we could see a major low in gold just about any time now, but most likely in 2016.
All we need to see are signs of a major turnaround. And you can bet we’ll be watching for this!
Once the major lows are in, a new bull market will be underway and we’ll want all of you to be on board for this rise.
The likely time we could see a major high during the end of that bull run would be in 2020, or possibly later.
You can see the blue lines and how consistent a major peak area occurs every 11 years.
Many factors also indicate a strong demand for physical gold and silver is ongoing now. And it’s been accompanied by a swirl of bearish headlines and commentary.
This is pretty typical at the end of bear markets, and it’s now happening again. As a contrarian, this alone is a bullish sign.
GOLD TIMING: Watch the D decline
The weak and bearish C rise in May told us the bear market was in control. And it was confirmed when the November lows were clearly broken. It also confirmed the start of a D decline (see Chart 2A).
As our subscribers know, D declines are the worst intermediate declines. And in a bear market, it tends to be the decline that hits new lows.
This fall overshot our $1100 target, but gold is currently well above $1100. If gold can now stay above $1080, the D decline may have already hit its lows… This is being reinforced by the fact that gold’s leading indicator is at a low area, which tends to coincide with lows in the gold price.
On the upside, gold will be out of the woods and in a renewed rise by rising and staying above the $1140-$1150 level.
These are the steps to be watching this month.
Mary Anne & Pamela Aden are well known analysts and editors of The Aden Forecast, a market newsletter which provides specific forecasts and recommendations on gold, stocks, interest rates and the other major markets. For more information, go to www.adenforecast.com