Remember last Friday when the jobs numbers came out for June and people started to say that they were so good that the Fed might not lower interest rates this month and gold could crash?
Well those gold crash predictors are wrong, but gold did not soar all week either. As I explained Monday for the time being the $1400 level on gold is acting as something of a price magnet. Understanding why is the key to knowing what will happen with gold for the rest of this year.
If you missed my video on this just go here.
One thing important to remember though is that gold and silver are a part of an overall commodity complex.
Typically in a big commodity bull market they go up first and then soft commodities follow.
I own a position in the DBA ETF, which is the main agriculture ETF, and it has also been going sideways after putting in a crash bottom in May as a result of the Trump/China tariff tensions that broke out at the end of that month.
Take a look at the chart.
So just as gold is going sideways after a big June rally the DBA ETF is also going sideways for a potential breakout.
If DBA were to rally above $17.64 it would also clear a stage one base and begin a full blown stage two bull market.
This is more clear on a long-term chart.
The 200-day moving average for DBA is now at $16.80 while its upper 200-day Bollinger Band is at $17.64.
The best time to buy something is when it begins a bull market and the single best buying setup is to buy on that very first consolidation breakout at the start of a stage two bull market.
That is essentially the consolidation phase that gold, silver, and the mining stocks are in now.
William O’Neill calls this a “cup and handle” pattern.
It is his best pattern.
But the masses right now are TOTALLY ignoring what is happening.
Check this out.
I made a Facebook post about gold this week and dozens of people commented telling me gold is going to crash or that gold is worthless.
This is the mindset of the average person in the United States now when it comes to gold.
They are totally asleep – or worse – some get triggered by the mention of gold somehow seeing it as a personal threat. Maybe they are crypto players.
But right now it’s impossible to go to a bar or a party and start a conversation about gold investing and have anyone listen to you.
And if you try to talk to your broker or investment advisor they’ll probably try to talk you out of buying into gold or mining stocks too.
That’s how it always is when a new bull market starts. People look backwards in the markets to what happened in the past few years and rarely forwards.
Oh I have no doubt that once gold goes up high enough the masses will begin to buy as they always love to chase.
But right now it’s only the few getting in now.
That’s why if you aren’t in my Power Investor group you need to go here to join now:
http://wallstreetwindow.com/join-power-investor/
-Mike
