Gold: Finally

by JDH on June 15, 2019

Let’s start with a long term perspective on gold; here’s the chart:

From lows around $600 in 2007 and 2008, gold had a great run, topping out over $1,900 in 2011, before collapsing to under $1,050 at the end of 2015.

Of note, gold never fell below $1,000.

The epic crash never happened.

$1,000 is quite obviously very strong support.

From that bottom at the end of 2015 gold entered a four year consolidation period:

From the spring of 2016 to the start of summer 2019 gold has traded between $1,125 and $1,375.  It was a long slow slog.

Which brings us to today:

From $1,266 on May 2, 2019 to a peak of $1,358 on June 14, gold has had an incredible pop, a 7% spike in 6 weeks, something we have not observed for a while.

What does it mean?

Could be nothing.

Trade tensions with China and a spike in oil prices due to hints of conflict may be causing a “safe haven” rush, and if the tensions die down everything could return to “normal”.

Of, after years of doing nothing, gold could be ready to spike.

I’m watching $1,375 and then $1,412, because that’s what my crudely drawn charts say is important.

I am maintaining my position in NUGT, the 3x leverage gold ETF, as a purely speculative play, and I’m also holding some gold stocks (EQX.V is my preferred holding at the moment), and we’ll see what happens.

Could be a disaster.  Could be fun.

For me, this will also imply continuing to liquidate my positions in Canadian pot stocks, which I’ve been doing over the last month or two (although I am looking at US cannabis stocks; they have room to run).

And yes, I am still short Tesla; that dog will eventually die.

That’s the update; more next week.