Gold Still Trending Inside Bull Flag
Gold price has created a descending parallel channel on the chart, and since it occurred after a significant move up it is more commonly referred to as a ‘bull flag’ due to the overall structure of the move resembling that of a pole and flag. The anticipated move here if price can remain inside of the upper half of the bull flag is a continued move higher and a break through and above the upper channel line. Should that happen price will likely march back up to test the recent all-time high made on Aug 10th of 22075/OZ, which I’d expect to be taken out and a new all-time high near 22200/OZ be made based on other charts that will be shared later with more detailed analysis.
Looking back at 2020 gold price performed extremely well, gaining roughly +43% from the March lows near 11450/OZ to the August high of 2075/oz. I’d attribute most of those gains to gold being a fear hedge during times of uncertainty in markets, which we saw plenty of in 2020. Gold also by nature performs well when the underlying currency it is priced in is being inflated(money printing). With a new round of $600 checks recently having been sent out by the outgoing administration, and $1400 checks on the way from the incoming administration, gold should continue to outperform over the next few years as stimulus checks and corporate bailouts appear to be the new norm and a necessity for the economy during these unprecedented times. Regardless of the reason, money printing is inherently bullish for gold so physical and mining shares will continue to be a portion of the portfolio.
Looking back at 2020 gold price performed extremely well, gaining roughly +43% from the March lows near 11450/OZ to the August high of 2075/oz. I’d attribute most of those gains to gold being a fear hedge during times of uncertainty in markets, which we saw plenty of in 2020. Gold also by nature performs well when the underlying currency it is priced in is being inflated(money printing). With a new round of $600 checks recently having been sent out by the outgoing administration, and $1400 checks on the way from the incoming administration, gold should continue to outperform over the next few years as stimulus checks and corporate bailouts appear to be the new norm and a necessity for the economy during these unprecedented times. Regardless of the reason, money printing is inherently bullish for gold so physical and mining shares will continue to be a portion of the portfolio.
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