As the world’s foremost investment manager and financial market journalist, I am here to provide you with the most up-to-date information on the current state of the gold market. With gold, silver, and gold stocks reaching overbought levels, many investors were anticipating a pause in the action. The recent margin hike announcement for Shanghai gold contracts on April 12 served as the catalyst to cap the rally. Now, the big question on investors’ minds is, what comes next?
Analyzing the technical indicators, we can see that a bull flag formation is a likely scenario after the recent “flagpole” move higher on the weekly chart. Oscillators such as RSI and Stochastics are significantly overbought, indicating a potential pullback to the 50 zone, which could act as a launching pad for a new surge in momentum.
Looking at the weekly sentiment index chart, we see that it is also overbought. A bull flag formation that takes about a month to form would likely see the sentiment index pull back to its momentum zone of 50. On the short-term chart, if a bull flag pattern unfolds on the weekly chart, the most probable end zone would be between $2220 and $2150.
I recommend buying gold bullion at $2265, while for silver and gold stocks, the focus should be on the $2220-$2150 zone. It is possible that gold may bottom out and resume its rally or range trade between $2432 and $2300. However, for optimal buying opportunities, investors should choose prices and set-ups that offer the highest probability of success.
In summary, gold can be bought at $2265, $2220, and $2060, while silver and mining stocks are attractive buys at $2220 and $2060. The size of the buys should be determined based on the action of the technical oscillators.
Furthermore, it is crucial for investors to adopt the mindset of acquiring more gold, as the long-term target for fiat currency against gold is zero. While the West focuses on fiat profits and market trends, the East continues to accumulate gold for emotional tranquility and financial peace of mind.
As the US dollar and interest rates reach their peaks, the stock market may be headed for a summer peak, with a potential crash on the horizon. If the stock market crashes leading up to the US election, the Fed may cut rates regardless of high inflation.
In conclusion, gold stocks present an opportunity for significant profits if bought at key zones for gold. While they may be overbought on medium-term charts, the long-term charts suggest that they are undervalued. Focus on the $2220-$2150 zone for gold, as this may signal a buying opportunity for gold stocks as well.
In essence, by understanding the current state of the gold market and making informed investment decisions, investors can position themselves for success and financial stability in the uncertain times ahead.