Gold is in the beginning stages of a new bull market that should last into the 2030s.
The last breakout of this magnitude was in 2005, which triggered a 6-year bull run.
By 2030, we see gold hitting our longer-term price target between $8000 to $10,000.
Commodity Cycles
Secular commodity cycles last about 30 years from peak to trough. During the first half, commodities beat stocks but underperform the last 15 years. According to the graph below, a new commodity cycle started in 2023, implying tangible assets should outperform stocks into 2038 before rolling over and underperforming from 2038 to 2053.
US Monetary Base
The US monetary base just increased by $53 billion, up $575 billion since February 2023. All this during what is supposed to be one of the most restrictive monetary policies in history. Could this be part of why gold is rising?
Commodities vs S&P 500 Ratio
The commodity-to-stock ratio reached historic lows leading into Covid, cheaper than in the 1970s. With a new commodity cycle starting in 2023, this ratio could return to 6.0 or higher by 2038.
Metals & Mining Technical Update
Gold Big Picture
Gold is confirming a major breakout above $2000. The last event of this magnitude was in 2005, when prices left the $400 level behind forever.
GOLD- Gold is short-term overbought, and prices are due for a pullback. However, it’s important to note that in robust bull markets, prices persist higher despite overbought conditions. Tomorrow’s employment report could trigger a short-term setback if the number exceeds expectations.
SILVER- I believe this is a significant breakout in silver as long as prices remain above $26.00. The next target is $30.00.
PLATINUM- Platinum is close to making a higher high, but there’s little to get excited about until prices rise above $1000.
GDX- Miners need to remain above $32.50 after tomorrow’s employment report to maintain this week’s breakout.
GDXJ- Juniors must remain above $40.00 to maintain this week’s breakout.
SILJ- Silver juniors must hold $10.60 to confirm the recent breakout.
WTIC- Crude oil finished above the trendline, and this looks like a breakout, which is not good for inflation.
Conclusion
The next big surge in gold has started, and sub-$2000 pricing may be a thing of the past. Gold miners are silly cheap and should play catch up in the coming months/years.
AG Thorson is a registered CMT and an expert in technical analysis. For daily market updates, consider subscribing www.GoldPredict.com.
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