It seems that every single analyst that you read regarding the gold market parrots the exact same thesis: If the dollar rises gold falls, and if the dollar falls gold rises. This is the first point in which these analysts have not put their brains in gear before engaging their mouth.

Please take a moment and go look at the US dollar chart since the fall of 2018. Then go take a look at the gold chart since the fall of 2018. What do you see?

Now, clear your eyes and look again. Can it be possible? Can you believe your lying eyes?

Yes, my friends. Both gold and the dollar have been in an uptrend since the fall of 2018 despite all the noise you hear that this is simply not possible. But, how dare you think for yourself and ignore what everyone “knows” is true about the metals complex?

Yet, if you read almost any metals article, they will tell you the exact opposite of what your lying eyes are telling you.

So, let’s move on. The next point we hear about incessantly is that gold is a safe haven from equity market volatility. So, I want you to go take a look at the S&P500 and compare it to the gold chart for the months of June and July when gold was moving up very strongly.

Have we now moved into the twilight zone? This simply cannot be. How can the dollar, gold, and the equity market all have been moving up together? But, we are told that gold is a safe haven for equity market volatility and moves opposite to the US dollar!? What is even more amazing is that gold has been rallying strongly even when the equity market was rallying to new all-time highs. Did investors need a safe haven from all-time highs?

I am sorry for making you swallow the red pill, but reality can sometimes sting. Now, the question is how many of you are going to put your heads back into the matrix?

So, in my last article about the GLD, I noted that I was looking for a very strong initial rally to the 138 region. And, we have struck that already. At this point in time, as long as we now hold over the 138 region, I am looking for further extension to at least the 144 region before we see the next larger pullback/consolidation. In fact, I outlined a gap up set up to the members of ElliottWaveTrader.net this afternoon, as I am writing this article.

As I am writing this, someone reminded me of an interview I did for an article for KITCO which noted our expectation for a major bottoming in the gold market back in July of 2018.

That seems to have worked out quite well thus far.

So, as long as the market continues to hold its supports in each consolidation phase we track (which we will continually update to our members), it keeps us on track in the new bull market. Should a support break, and depending on how it breaks, it could still open a bearish door. We will cross that bridge if we come to it. But, that is why risk management and stops are so important.

See charts illustrating the wave counts on the GLD, GDX and more.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

© 2019 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.