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Gold Continuation, Silver Catch-Up in Loose-Money Election YearIn a year that will likely be mired with rate cuts, QE, and rising budget deficits - expect gold to continue its 2019 breakout. Fibonacci, trendline, and XAUJPY calculations give us a target range of 1711-1823 in the price of gold. In achieving this target we expect silver to catch up at least to the low 20's. This move looks highly likely in 2020 and will result in significant repricing in silver junior miners. Keep accumulating ounces and company shares. Heading into the top of this move we will be taking defensive action as we expect a significant correction to occur. It won't be a straight move through $2,000 gold. Given that: 1. The miners and silver have been severely lagging gold which has NEVER been a positive sign for a sustainable multi-year bull market 2. large resistance exists at the 1800-1900 level 3. Monetary policy lags the market, meaning the Fed rarely moves quickly in a straight line. there's a solid chance the Fed bluffs a hawkish stance, causing a temporary gold sell-off It is likely we will correct and consolidate prior to breaking through 1900. Other Thoughts: Monetary policy operates with a lag, which means the rate hikes and QT from 2017-2018 is still creating headwinds for this market. Although the market odds have not yet priced it in, it is almost certain the Fed will not hike in 2020, and it is increasingly likely they will cut rates at least 1-2 times. QE is likely here to stay and expand. The Fed wants a weaker dollar, Trump wants a weaker dollar, and the global markets want a weaker dollar. Expect a weaker dollar unless the Fed wants a liquidity problem. Monetary policy, more than ever, is the driver of this market. I could be wrong and gold could fall - but that would require a very tight monetary policy which would almost certainly cause problems in stocks and debt markets. So be watching the Fed, listening very closely, and watching how the markets respond. Earnings have never mattered so little. All that matters now is central bank liquidity.
FX_IDC:XAUUSDLong
by Ludwig_Von_Mises
6
Silver Junior Miner Value Hunting - SPA / SPAZFSpanish mountain has very little debt and is highly leveraged to the price of silver. Very little downside here, tons of mid & long-term upside potential. Intrinsically undervalued company & assets. They're sitting on a literal mountain of silver trading well below their 2016 peak. Conservatively I see SPA / SPAZF increasing 150% in 2020. All this requires is SPA getting back to its 2016 high when silver was at $19. If we get $21 or $25 silver, which I believe is highly likely in 2020, then a 1.5 bagger in Spanish Mountain is pretty much guaranteed. It could fall from 9 cents to 6 or 5.5 cents, which is a 30-40% loss, and it could easily rise 150%. That's an extremely favorable risk-reward. If silver were to rise to $30, SPA could rise 400%. 50$ silver would give us close to 1000% gain in SPA. And eventually, when we get 3 digit silver. Whether that's $100 silver or $500 silver. Juniors such as Spanish Mountain could become 20-100x baggers. Think long-term ;)
TSXV:SPALong
by Ludwig_Von_Mises
1
The 2020 GDX OUTLOOK>>YIELDS|STOCKS|FED Policy& GOLD>>(Part 2/4)Short Analysis on GDX/Gold in 3 bullet points; Series on Commodities and the 2020 outlook - 21st of December 19' Before I get into the analysis, wishing you all Happy holidays! Here's the simpler version of the chart: 1. Few key takeaways: Despite that the current resistance at ~31 is holding , the breakout in GDX is eminent . The question is of the timing . From part 1/4 analysis on yields(Ref #5) it seems that yields are looking somewhat bullish. Of course, this is based on the assumption that "Not QE" will continue and eventually QE-4 will be announced . Nevertheless, this means that equities will continue to be bullish, even in sectors such as materials (Ref #6). If we get another series of rate cuts, GDX could breakout as early as Q2 of 2020. For further discussion on QE and monetary policy, visit part (1/4) on Treasury yields: 2. Recently there has been somewhat of a small bounce in PMI's . This was expected as the global monetary policy stance of CB's took a dovish turn in 2019, and the easing environment affects the real economy with a lag . Taking this into consideration, $GOLD may continue the horizontal path that it is currently on. This bounce in the macro data may be very dependent on the outcome of the trade negotiations , which hopefully we will find more about in January. 3. Not expecting gold to make new highs in the first half of 2020 . As the election cycle unfolds, there should be more volatility depending on the election circumstances. It's still very early, but it doesn't look good for the Democrats, in which case a breakout in both GDX and GOLD may be postponed . It's all labelled on the chart. To sum up, based on more accommodating monetary policy, the bottom line in GDX should hold above 27$. The horizontal range (27-31.25) should sustain before we get a breakout triggered by either the election cycle or potential economic shocks . This is a perfect iron condor trade setup . Materials as a sector has been very under-weighted and hasn't performed well, compared to the cyclicals . As the global economic slowdown continues, it seems that there isn't any downside in holding gold as a stock market hedge . Either way, balance sheet expansion favors all assets, especially substitutes for the dollar- gold. Tried my best to keep it short and simple, this it for GDX and GOLD. -Step_ahead_ofthemarket- ________________________________________________________________________________________ >>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>> However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated! References & Disclosure: 1. FED rates Super-cycle 1980's- 2. Dollar/Yuan breakdown, trade progress and tariffs: 3. Previous Gold chart: 4. XAUXAG, Gold aginst Silver ratio: 5. Treasuries and QE: 6. XLB Sector, US materials: Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
AMEX:GDXLong
by step_ahead_ofthemarket
7