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Gold for the Long Haul?


Gold has entered last phase of this bull cycle.

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Gold for the Long Haul?
Kevin Depew, 11:05 a.m.

As Fil and I discussed last week, gold has a qualified breakout on the daily chart via DeMark price exhaustion techniques. The probabilities for the short term are higher prices, with targets at 941 and 947.

Longer term, the picture is much clearer.

Let's look at some charts.

1. Here is a long-term quarterly chart of gold. I like the long-term charts with DeMark TD-Sequential or Combo applied, because I think they provide added context to daily and weekly moves. This seems pretty clear-cut on the quarterly basis; a TD-Sequential sell signal.


2. Weekly shows downside TDST (solid red line) break has been "qualified," and subsequent sell setup now perfected. This means there's a very low probability of gold proceeding to countdown 13 and more danger of downside.


3. As noted above, the daily shows a "qualified" break of TDST (solid green) line, so full countdown to a sell signal is probable.

4. What about a target? Here is the downside target using TD Absolute Retracement.


5. By the way, gold denominated in euro looks much more positive short-term, as one would expect intuitively, but longer-term the picture is much the same, perhaps a quarter or 2 behind.


I'm not dogmatic about gold. It's simply the case that this technical work tells me gold has entered the last phase of this particular bull cycle. A retracement of this bull leg to 619 does not spell the end of the gold boom forever... unless, of course, that retracement if/when it comes is broken in a qualified manner. But we'll have to cross that bridge when we come to it.

On the other side of this deflationary debt unwind, there will again be a resurgence of inflation. But this work tells me that resurgence is many, many quarters away. In the meantime, there are bigger fish to fry.

If one owns gold as some kind global doom hedge or has a garage filled with sacks of coins for some kind of hyperinflationary bust, then none of this matters anyway. Who cares if it goes to 619 in that case? And what about hyperinflation? Well, I'll say this: Hyperinflation is the only economic condition wherein having money is simultaneously the greatest and the least of your concerns.
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Positions in gold and gold stocks

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