Weekly Update: The Start of a Gold Super Cycle?
Good evening, and welcome to this week’s edition of Traders War Room!
For a decade, gold has gone nowhere.
After peaking at $1,900/ounce in 2011, the yellow metal has failed to deliver.
But that is finally changing…
Gold is up almost 20% in the last two months after breaking out from a 13-year base.
The weekly chart above shows the price of gold over the last 15 years. Notice the shallowing base formation we typically see before a breakout.
For long-term trades, this is about as pretty as they come.
The nice thing about commodities like gold is that they tend to trend much better than stocks. Metals, oil, even coffee can make steady runs that last several years.
Gold has a history of what I call “super cycles.”
Starting in the late 1960s (as far back as I have price data), gold consolidated for four years before marching 340% higher.
This period from 1972 until 1975 was a super cycle.
It happened again in the early 2000s…
After spending a decade forming a base in the $300-$500 range, gold soared to over $1,900 over the next six years.
And here we are today, breaking out of a similar pattern after another decade of no action.
These past moves in the gold market give us a precedent for what we might expect from this rally. If history repeats itself, that means gold at roughly $8,000 per ounce.
Don’t think it can’t happen. It will. The only question is when.
The backdrop is set. Record inflation, a fiat currency backed by unfathomable debt, and 13 years of catch-up could easily double or triple the price of gold. I’m surprised it’s not already higher.
The easiest way to take a position in gold is buying GLD – an exchange traded fund that tracks the price of gold.
But there’s another way too…
Gold mining stocks typically move in multiples of what gold does. This is because relatively small increases in the price of gold can dramatically increase their profit margins.
GDX is the gold miner ETF, and as you can see in the chart below, it is still well off its 2020 highs.
Mining stocks are soaring with leading names up 30-40% in just the last month.
But if this indeed the super cycle gold bugs have been waiting for, there is a LOT more left to come. Even a move to $3,000 an ounce would cause some of the smaller miners to climb several hundred percent.
I am hosting a LIVE webinar tomorrow morning to cover this opportunity in depth. The details are below:
SPECIAL WEEKEND WEBINAR EVENT
Saturday, April 13th @ 11am ET (10am CT)
Register Here
We will be discussing both the gold market and a proven strategy for buying the best stocks at the right times.
I’ll see you in the morning.
Best wishes for your trading,
