People are asking me if gold’s breakout is the real deal.
All I can do is smile, state my bullish outlook, and draw a line in the sand.
Of course, I can’t resist adding an obnoxious upside target or two (the higher, the better).
Hopefully, it sounds simple. That’s the goal! It never pays to overcomplicate price action….
If you’re still wondering whether precious metals are a viable investment despite gold’s new all-time highs, let’s identify the underlying trend…
The gold rally off the 2018 lows led to a multi-year consolidation that is now resolving higher — uptrend intact.
Plus, what an impressive stick from gold last month:
Richard Wycoff would call last month’s candlestick a wide-bodied bar — an indication of willing buyers. It’s a significant sign of strength.
Gold futures rose 8.94%, closing near the March highs and solidifying its breakout.
If gold’s bullish candlestick, underlying uptrend, and new all-time highs fail to squash your lingering doubts, check out the gold miners…
The Gold Miners ETF $GDX also enjoyed quite the bid last month, gaining more than 19%:
I never dismiss double-digit returns — even for cryptocurrencies.
But GDX reclaiming a critical shelf of former highs outshines its monster gains.
Those former highs — at approximately 30 — acted as resistance for nearly a decade. GDX trading back above that level marks the constructive beginnings of a bullish reversal — reversals individual mining stocks have already completed.
Plus, a bid for mining stocks speaks to increased risk-seeking behavior.
Check out Equinox Gold $EQX slicing through overhead supply:
EQX is a buy if it holds above 5.50, with an initial target of 9.50 and a secondary objective of 13.50. (Trust me, those targets aren’t as obnoxious as you think.)
Gold futures are ripping higher, GDX is regaining a critical polarity zone, and more mining stocks are flashing buy signals.
I’m unsure of far more than I like to admit. But at least I don’t have to worry about gold.
