{"id":3078,"date":"2024-04-13T00:02:30","date_gmt":"2024-04-13T00:02:30","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/04\/13\/from-relic-to-reckoning-can-gold-surge-to-3000\/"},"modified":"2024-04-13T00:02:30","modified_gmt":"2024-04-13T00:02:30","slug":"from-relic-to-reckoning-can-gold-surge-to-3000","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/04\/13\/from-relic-to-reckoning-can-gold-surge-to-3000\/","title":{"rendered":"From Relic To Reckoning: Can Gold Surge To $3,000?"},"content":{"rendered":"
\n

The strange thing about gold is that it\u2019s always<\/em> a relic \u2026 until it isn\u2019t. And when it isn\u2019t, everyone swears it\u2019s always <\/em>been an alternative currency (why would anyone have thought it was a relic in the first place?).<\/p>\n

Relic or \u201csound money\u201d reckoning, the yellow metal\u2019s surge\u2014notching a record-high of $2395.60\u2014stunned non-believing investors and even die-hard gold bugs. Here\u2019s the thing: some analysts are saying this record high is not the top but rather the bottom range.<\/p>\n

Why Are Some Analysts Claiming Gold Can Reach $3,000?<\/h2>\n

$3,000 an ounce is 25% higher than the current price and a 64% rally from its last significant low in October 2023. But what would drive gold to such heights?<\/p>\n

Fiat currencies under pressure; financial repression (as BofA<\/a> noted back in 2020)?<\/span>
\nStubborn inflation; massive government debt (says European financial engineering firm, Mind Money)?
\nBRICS de-dollarization efforts; new gold-backed currencies being issued across the globe\u2014all aimed at challenging the US dollar\u2019s unipolar position?<\/p>\n

Let\u2019s take a look at the gold\u2019s macro price action.<\/p>\n<\/p>\n

CHART 1. MONTHLY CHART OF $GOLD. Note its series of sideways fits and start leading up to its current parabolic rise. <\/span>Chart source: StockCharts.com. For educational purposes only.<\/span><\/em><\/p>\n

Here\u2019s gold\u2019s trajectory starting with its 2016 low. Most of the time, the yellow metal traded within a fairly wide range between uptrends.<\/p>\n

Note the Chaikin Money Flow (CMF)<\/a> highlighted in blue circles. This indicates momentum via buying pressure.<\/span><\/p>\n

In 2016, buying pressure rose after gold had established its high (institutional buying?) but selling pressure got nowhere near the depth it did before reaching that high.
\nIn 2019, CMF levels again broke above the zero line, this time followed by a mighty breakout (see black dashed line) and rally as the Fed\u2019s repo market injections were likely perceived as yet another form of quantitative easing.
\nAnd in late 2023, despite high valuations but amid escalating geopolitical risks and de-dollarization worries, the CMF broke above the zero line again, leading to the incredible surge we saw over the last two months.<\/p>\n

Here\u2019s the big question \u2026<\/p>\n

Is 2023\u2019s Price Ceiling the New Price Floor for 2024 and Beyond?\u00a0\u00a0<\/h2>\n

Currently, analysts from leading banks are revising their gold forecasts noting the clash between short-term economic shifts and deeper geopolitical fractures are rendering traditional valuation metrics obsolete<\/em>.<\/p>\n

Let\u2019s take a look at the current price action.<\/p>\n<\/p>\n

CHART 2. DAILY CHART OF $GOLD. Note the parabolic move that\u2019s losing momentum. <\/span>Chart source: StockCharts.com. For educational purposes.<\/span><\/em><\/p>\n

If you\u2019ve been following national news, you\u2019re probably aware that gold bullion sells like hotcakes at Costco. What does this say? Despite its sky-high valuations, it tells us there\u2019s a frantic retail dash for gold.<\/p>\n

Still, there are many technical and fundamental reasons to expect a pullback.\u00a0<\/p>\n

For starters, sticky inflation (did you see the latest CPI and PPI report?) indicates the possibility of interest rates being higher for longer.\u00a0
\nThe Money Flow Index (MFI)<\/a>, a volume-weighted RSI, is well within \u201coverbought\u201d territory.<\/span>
\nThe CMF, this time on a daily scale, has dipped into \u201cselling pressure\u201d territory.<\/p>\n

Yet, there are many reasons to be bullish on gold\u2014technically, from a macro perspective (as you can see in the monthly chart above) and fundamentally, as discussed at the top of this article.<\/p>\n

Keep an eye on $2,100\u2014that\u2019s the 2023 resistance<\/a> level. Will it provide support for a next leg up?\u00a0\u00a0<\/span><\/p>\n

When prices dip, what if it doesn\u2019t sink to that level? In this case, watch the most current swing low at $2,150 in conjunction with the Kumo range of the Ichimoku Cloud<\/a>.<\/span><\/p>\n

Gold is the Fear Trade<\/h2>\n

Gold\u2019s rally to $2,395.60 and the whispers of a potential climb to $3,000 mark a seismic shift in how investors view the age-old asset. It also reflects fears surrounding the economy, the future status of the dollar amid de-dollarization, and dwindling faith in the Federal Reserve\u2019s capacity to implement sound monetary policy.<\/p>\n

Gold is the fear trade. And if you\u2019re bullish on gold and monitoring all of the fundamental and geopolitical news affecting its valuations, now you have the technical context to get the 360-degree view you need to make your own forecast.<\/p>\n<\/p>\n

Disclaimer:<\/em><\/strong> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The strange thing about gold is that it\u2019s always a relic \u2026 until it isn\u2019t. And when it isn\u2019t, everyone swears it\u2019s always been an alternative currency (why would anyone have thought it was a relic in the first place?). Relic or \u201csound money\u201d reckoning, the yellow metal\u2019s surge\u2014notching a record-high of $2395.60\u2014stunned non-believing investors […]<\/p>\n","protected":false},"author":0,"featured_media":3079,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3078","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3078","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3078"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3078\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3079"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}