Gold Holding Above Key Support, but Expect Volatility Ahead …

Gold closed last week, and last month for that matter, well above key support, which stands at the $1,245 level.

Closing above that level on both a weekly and monthly time frame is technically bullish for the yellow metal, but caution is still advised.

Gold continues to trade in a relatively tight trading range between roughly $1,200 and $1,300, mostly driven by the movement in the dollar. So we have to keep a close eye on the dollar to predict the next major move for gold.

The Edelson Institute Cycle Forecast Chart on gold still shows that we are near a temporary low in gold and that we should see a sizable rally heading into the middle of the fall.

However, there will be plenty of upswings and downswings, so you must be nimble with your trading.

As you can clearly see in the chart above, our cycle models have gold making a temporary low in the next week or so before it rebounds to the upside over the next several months, but with a healthy dose of volatility along the way.

As I have warned many times before, patience is required when dealing with the gold market as we have not yet elected any of our major long-term buy signals, but we are getting closer.

Gold will rally only when investors begin to see that the financial system is failing and they lose complete and total confidence in government debt. That is when you will see gold finally breakout to new highs and head toward my target of $5,000 an ounce. We are inching closer and closer to that day of reckoning.

Increasing stress in the global macroeconomic environment should remain a positive driver for gold prices over the rest of the year.

Plus, increasing stress in the global macroeconomic environment should remain a positive driver for gold prices over the rest of the year and probably beyond.

Rising U.S. interest rates will remain in place for the foreseeable future. But the speed at which the Fed moves toward a ‘normal’ policy will continue to be slower, and most likely, not any faster than markets are already pricing in.

Plus, there remain plenty of political and economic risks, including:

  • The ongoing challenges of Trump’s tax plan/economic initiatives;
  • Tensions in the Middle East as well as the Korean peninsula;
  • The outcome of Brexit negotiations, plus multiple elections in Europe.

So, at the very least, while these and various other political and economic issues continue to bubble to the surface, we should continue to see safe-haven money flowing into gold. That’s when I would recommend looking to accumulate on dips.

In fact, gold, silver and mining stocks are just now getting warmed up for much bigger gains in the years to come, and the buying opportunity of a lifetime in gold awaits patient investors in the near future.

Good investing,

Mike Burnick

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Comments 19

  1. nelson June 5, 2017

    Can you remove Larry’s pic. We all love him but he’s gone and seen his picture everytime we open the newsletter creates sorrow knowing he is no longer here.

    Reply

  2. Stephen Ettinger June 5, 2017

    For Mike B.,
    IF the Treasury takes over the Financial Sector of the United States and declairs that “TEFRA” Tax Equity and Fiscal Responsibility Act is enforced and takes 1/3 to 1/2 of everyones retirement account to pay down the National Debt, we will see Gold Skyrocket to $5,000/ oz. and then some. This will happen while we are sleeping and wake up one morning and half of our lifetime savings and for many of us- 20 to 50 years of working hard and saving gets wiped out. -But to jump unequivocally to this level unless the dollar collapses is just a guess. I have been monitoring Larry and now you for 5+ years. Before Larry Passes, he told us we would be e-mailed as your investors who subscribe to your service when the time was right to jump in and add to our valuations in core holds within the metals market. You told us if we hold above the $1,275.00 level to start adding to our holdings. Now you are telling us nothing. To be cautious means nothing other than sit tight. Do we buy in more now??? or wait till we get above the magical $1,300 /z level????????? Caution means sit tight. Don’t buy & don’t sell.
    So what is it MIKE B??????????

    S.S. ETTINGER

    Reply

    • Jimmy June 6, 2017

      If the Feds want to add about 100,000,000 more people to their”watch list”, stealing half of our retirement $$$ would be a “great” way to do it. This country would devolve into pure anarchy.

      Reply

    • M.H. June 6, 2017

      Indeed, there is a (“sleeping”) Bill in Congress pertaining nationalizing all IRA’s, 401’s and other pension plans. The ultimate nightmare for 75 million baby boomers.

      Reply

    • Mark H June 6, 2017

      As the Congress/Senate continues to operate the largest criminal racketeering syndicate in history, they will stop at nothing to take down President Trump. He has more honesty and patriotism in his little finger than all of them combined. The establishment would not hesitate to sell us all out including TEFRA and are proposing to outlaw cash. When the Federal Reserve and global bankster’s pull the plug on the stock market/global economy, there will be a major tax hike on precious metals to confiscate that as well as your savings and pensions. Who will you sell PM’s to when everyone is broke? The Federal Reserve will utilize all it’s global bullion banks to place massive naked short positions at Comex that will crush any hope of a PM safety net. Politicians will continue to use our treasury as their private piggy bank with no accountability, just blame the other “party”, lie, deflect and draft punitive, unconstitutional laws until we are transformed into serfs. The Bill of Rights is already a worthless document having been gutted long ago. Trump will never be able to drain the swamp of these corrupt lawyers gaming the system.

      Reply

      • Billy Bud June 8, 2017

        Mark H. —- Kudos to your post. Great analogy , people are trained to be blind. Tell them a lie and they believe it, tell them the truth and they fear you, and want to kill you.

        Reply

    • V.L. June 10, 2017

      In Italy they have been doing it for over two years. A friend of a friend was a victim of this. He had 400,000 euros in the bank and ready to start building his home. The bank made excuses of errors pretending to fix them – but never fixed them. At the time of the story he was lucky if there were 10,000 euros left. Victims are picked randomly – and from different towns – no chance that they would group to fight the injustice.

      I think we should ask President Trump about TEFRA – he may not know about it. I doubt he would allow it.

      “”Jimmy “”(below) – Yes Obama could have done it for the same reason because they were so sure that Clinton was going to win. She said she would have raised our taxes.

      I see that some of you expect answers for your questions – but I have never seen any answers from these e-mail’s questions given by the writer of the Wealth letter, except from those of us that reply to your e-mail like I am doing now.

      Reply

  3. Richard S June 5, 2017

    Gold and silver have reacted a bit to the world news including Korea but one would have thought that with all that news, killings and worries that it would be over 2000 especially with a lot of people trying to sabotage our government and nation. Exactly what is their goal? Trying to collapse the nation? Where would that get them? Do they even have a goal? The people funding the anarchists certainly must to put up such high amounts of funds. Sounds like subversion to me.
    If its to actually rise much what must the news be like for this fall or late summer?
    Look at the weapons being produced these days albeit in low quantities and we still have incompatible people being brought into country. Those represent very serious dangers. We have a serious divide between people that dont understand these dangers, including politicians and those better informed but afraid of being politically incorrect. So what is going to drive metal prices higher? I dont think it will be a thriving economy anytime soon under current threats to it by leftists. So that kind of leaves economic catastrophies. This summer?????

    Reply

  4. A Long Time Subscriber June 5, 2017

    Mike,
    This last chart on gold presents a MAJOR revision of your prior chart of a month or less ago. I realize that you need to update your “models” with actual data, but I do not have any recollection that Larry ever revised his charts to the extent that you have revised this one. Label me “disappointed”.

    Reply

  5. Stephen S. Ettinger June 6, 2017

    Seems like every month we read our publication regarding when the next low in gold is to come, it gets pushed back another month. Do u have a bottom range? We have read from Larry and you we could see a $900 bottom. Is this still a strong forecast or are we looking more at a $1,050 bottom?
    Thanx.
    Steve Scott

    Reply

  6. Wayne Brezinski June 6, 2017

    Hi Mike and Crew, I would like to hear your opinion about how Bitcoin could play into this scenario with gold and silver, i read an article on Kitco yesterday in their news section my apologies i dont know who wrote it as its no longer there but he used a chart showing all 3 gold,silver,bitcoin and bitcoin has surpassed that of all silver in dollars and seems poised to continue to grow. Just like the scarcity of the precious metals i believe there are also only 20 million bitcoins and yes I know there are other cryptos out there but bitcoin is the leader, I personally dont play with bitcoin but thats also where big money could be headed or maybe is already there and being used as a safe haven that is if its considered safe. Your thoughts?

    Reply

  7. James June 6, 2017

    Where exactly in the boom, recession, depression, recovery and growth cycle are we in? Are we in for a gold tranche, possibly even the dollarization of the world economy? Are we in for a gold tranche? Possibly even a return to the gold bullion standard? What about the returns to labour and capital in the Cobb Douglas production function? Are we in for some much needed growth in the solow steady state level of income? Are we in for some much needed growth in the returns to labour and capital? What about the Cobb Douglas production function? Are we in for increasing returns to labour and capital in the Cobb Douglas production function? What about economies of scale? We are in for a big boom I think. We are possibly in for one of the biggest boom the world economy has ever seen? We are in for the possible dollarization of the world economy? Where abouts in the boom, recession, depression, recovery and growth cycle are we in. Could we be in for the possible dollarization of the world economy? We are in for a big boom, that’s for sure? Even possibly a bigger boom than was on during the last boom ten years ago? I am also predicting a bull market in the stock market. We are in for a big boom that’s for sure.

    Reply

  8. Dave June 6, 2017

    Hey Mike, I agree with Nelson. PLEASE stop using Larry’s picture and referring to what HE has said in every other line. It’s time for YOU to take full responsibility. While we’re at it, I really question the wisdom of the publisher’s decision to raise the price of The Real Wealth Report less than 2 months after Larry’s passing. Larry WAS the news letter and now he’s gone… and the price goes up? What are you people thinking!?

    Reply

  9. M.H. June 6, 2017

    Hello,
    I’ve been saving all gold charts before/after Larry’s passing. Thank you for clarifying the discrepancies in recent charts. Whilst the physical gold is moving higher, the AI charts are lower and, vice-versa. Confusing. The chart dd. 1/27/17 shows gold moves beyond $ 1356.90 on 07.01.17 (abt. $ 1443.00). However, the chart dd. 2/10/17 shows physical gold dropping like a stone after 5/20/17 which was not the case.
    I’d think that the AI would take into account all unknown variables. Thank you.

    Reply

  10. Billy Bud June 8, 2017

    Doug Casey mentions the coming of fed-coin from our government . Paper money will be non existent, all about control of the population.

    Reply

  11. Bud Markos June 8, 2017

    Mike,

    Why does the vertical axis on your graph not have any identifying price information (similar to the date information on the horizontal axis?) Very difficult to work with it in this condition, when the addition of this basic information would highly enhance the graph’s utility.

    I have asked this question a number of times and HAVE NEVER received a response. Hopefully someone on your end will be courteous enough to break that cycle.

    Thanks,

    Bud Markos

    Reply

  12. lgary June 9, 2017

    Have we missed our chance to back up the truck for gold, or do we get our chance later?

    Llalon Miller

    Reply

  13. David Bennett June 11, 2017

    I would say about gold. “There is no current geometry in charts for calculating any high targets currently”… The very strong, very clear 30 year cycle in commodities in general emerged in a big way starting on or around 1900. The leader in this 30 yr cycle appears to be crude oil!! The 20 yr quite portion average mean of ((cash spot)) price/ verses the final 10 yrs of these 30 yr cycles have yielded approx. 350% 1940-50, 725% 1970-80, 1050% 2000-10, now extrapolate, add 300% = 1350% 2030-40 and gold has moved in lockstep with this ((crude spot cash)). If your expectations are to sell incorrect knowledge to the public to “sell something” be my guest, but if you are “highly” concerned with “accuracy” the lowest, LOWS for gold have highest probability to fruition between 2025-2030.

    Reply

  14. wvck June 13, 2017

    will Gold Mining Millionaire cease to exist?

    Reply