Given a world rife these days with natural disasters, from hurricanes Harvey and Irma, to Mexico’s monstrous quake and the madman of the NorK, Gold continues to roll higher, now having recorded “higher highs” in seven of the past eight weeks. High times indeed, for as in the above panel we see that Gold is further above where ’twas at this time a year ago, and moreover seems on a beeline to at least test 2016’s high at the storied command post of Base Camp 1377.
With Gold’s “expected weekly trading range” now at 29 points, price may well make that climb within a week’s time, having settled yesterday (Friday) at 1351. And as graphically described a few missives back, above 1377 there is comparably little price resistance all the way up to the 1600s. As a friend of The Gold Update queried this past week: “Is this IT?”
The inference of said “IT“ is for Gold to finally embark on the long-overdue run to a far higher, more sensible valuation. However, “IT“ for others is for Gold to conclude what has been a +11% run in just these past eight weeks. The latter inference would be the typical, technically-expected case for a normal market that has been on a good run to now correct. Gold however through much of this millennium was also a market that was normal, rising as it ought in tandem with the StateSide money supply. ‘Course come 2011, Gold pushed its tyres (as we say in Formula One) beyond the bounds of adhesion, the driver thus losing control to become but a mere passenger in an abnormal, four-year -45% shunt, completely disconnecting from the ongoing rise in the money supply. So which “IT“ is it? Let’s update our most favourite Gold chart:
For the present, “IT“ to us is what happens as Gold looks to yet again retest Base Camp 1377. Aptly named during Gold’s fallout following the 2011 All-Time Closing High of 1900, 1377 became the supporter from where back in 2013 price tried to re-establish itself for a renewed ascent, only to have that level instead become a dominant resistor as you can see across the green line in this next graphic. And note again how swiftly Gold fell prior to its first encounter with 1377; that’s a lot of upside, unfettered territory to regain:
