Gold Update – Precious Metals Close to Confirming a Bottom
GOLD CHART
Gold tagged the lower dashed trend channel as projected and completed a swing low. I think gold reached a meaningful low. I bought gold miners for our educational portfolio yesterday.
Gold miners are showing subtle signs of strength and may have bottomed last week. I see a lot of similarities between now and the 2016 correction (see below).
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GDX 2016 CORRECTION
After a very sharp rise in 2016, miners entered a multi-month corrective phase. The 2020 pattern is following a similar path and could confirm a bottom soon.
Note: The third and final breakdown (below the November 2016 low) lasted about 2-weeks; prices bottomed 4-days after the initial breakdown and closed back above the November on day 10.
GDX 2020 CORRECTION
After a sharp post-Covid rally in 2020, gold miners entered a prolonged 2016 style correction. The pattern stretched a bit longer, but we have completed the three drops and broke the November low. I believe prices bottomed and are about to establish a new uptrend.
GOLD MINERS LONG-TERM OUTLOOK
I wanted to remind everyone of the big picture regarding precious metals. If commodities are starting a decade-long bull market, as I suspect, then the retest of the $30.00 breakout in GDX, that just occurred, could turn out to be one heck of long-term entry, in my opinion.
Several factors favor a bottom in precious metals. A strong and decisive move in GDX back above the November $33.00 low would promote this outlook. Longer-term, I believe precious metals are headed much higher.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more updates, please visit here.