Gold To Move Higher Into Year End:Here Are The Factors.
The dynamic monthly cycle is rising. When this cycle is rising in these 2 months, add 10%-15% to the monthly bullish probabilities
The next seasonal peak is in mid-October.
For those readers who may be new to the cycles analysis approach, here are the guidelines. The most basic cycle is the annual seasonal cycle. For example, we all know that stocks tend to be strong in the spring and in Q4, weak in September, etc. The gold annual cycle is graphed below.
1-Gold Monthly Histogram (Expected Return)
The June-September period has been the most bullish time interval for gold. Cycles Research Investments LLC
The next cycle is dynamic. All cycles are calculated and the profitable cycles are accumulated and projected into the future. The best projections are those in which both sets of cycles point up or both point down. Currently, both point up.
Here is a valuable feature of cyclical analysis. Gold had formed a triangle, and then broke down from this formation in late July. Application of basic technical analysis would have called this a serious breakdown and a sell signal. The rising monthly cycle was an indication that this break was false. Following the cycle and remaining long gold paid off.
2-Daily Gold
Note the false break and the subsequent recovery. Cycles Research Investments LLC
3-Gold Monthly Cycle
The monthly gold cycle rises through 2025. Cycles Research Investments LLC
To set a new price projection, one measures the height of this triangle formation, about $400. Adding this to the point of breakout projects a $3800 price target.
The August-September time period has been the most positive seasonal interval. Momentum is strong, so higher prices are likely to the 15th and beyond to $3800. Do keep in mind that gold (and oil) tend to be very weak in the second half of October.
There are different ways to profit from the gold rally. There are two ETFs that are recommended.
SPDR Gold Shares (GLD) tracks the gold price. A 1% rise in the metal price will raise this ETF price by 1%. More aggressive investors may prefer ProShares Ultra Gold (UGL). This leveraged ETF moves at twice the gold price. In addition, there are many gold mining stocks.
One of the best known and most liquid is Newmont Mining. Below, we see the three-up graph, the monthly price cycle projection, and the monthly price histogram. We see a new high in relative strength in the daily strip. There are higher lows in momentum both weekly and monthly. And, a three-year relative downtrend has been reversed to the upside. The monthly cycle rises through yearend. Chart 6 is the monthly histogram of the share price. Keep in mind that the month of October has been very weak.
4-Newmont-Daily, Weekly, Monthly
This is a bullish picture. Cycles Research Investments LLC
5-Newmont Monthly Cycle
This cycle also rises through 2025. Cycles Research Investments LLC
6-Newmont Monthly Histogram (Expected Return)
August has been the strongest month for NEM and October has been the weakest. Cycles Research Investments LLC
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