Eyes are on the Gold Market. All-time highs do a great job of getting everyone’s attention, especially if it hasn’t happened in a while. We’re going on almost a decade since precious metals hit their peak and completely collapsed. As bad as Gold did, Silver really got destroyed. To put things in perspective, from the March 2020 lows, it will take a 328% rally in Silver just to get back to where it was in 2011.
Today, let’s focus on Gold. Are we going to make all-time highs? What is the all-time high? Do we look at weekly charts, monthly charts, daily charts? What actually is “The All-time High in Gold?”.
First, let’s keep in mind that this conversation would not even be necessary if we priced Gold in any other currency outside of the US Dollar. The Dollar strength, which is the denominator in this Gold conversation, has held it back, compared to what it’s done priced in other denominations.
Look at this table showing all of them already making new highs:
So why should we care JC? Gold is priced in USD!!
We take a weight-of-the-evidence approach here. With that in mind, when you weigh all the evidence, isn’t most of it pointing to all-time highs? In fact, isn’t most of the “evidence” already making all-time highs? Why should we expect it to be any different when priced in dollars? Maybe a little slower, but still trending in that direction: Up.
The next question: What actually IS the all-time high? Is it the intraday high in 2011? The weekly closing high? The monthly closing high? Let’s take a look.
Here’s one way to look at it. In this case, you’re betting that we’ve already broken out of this monster base and that last thrust in 2011 was just that, a final thrust with very little participation. The resistance right at $1800 from Nov 2011 – Oct 2012 reiterates that point:
While I don’t think this is the only case to be made, I do think it’s a pretty good one.
Here’s a different look, giving more credit to the absolute all-time highs above 1900:
What if we look at weekly closing prices? Then you’re looking at about 1875 to have to clear to make new all-time highs:
And if you want to talk monthly closing prices, then we’re flirting with those levels now. This chart is based on the June close. Coming into July, there has only been one month in history where Gold closed at a higher price: August 2011. A close later this month above 1830 would make this the highest ever.
I think there are a few important points to make here.
First, the trend here is not down.
Second, Gold has been making new all-time highs priced in other currencies for years already. So doing so priced in US Dollars would be nothing out of the ordinary, and really not a big deal.
Third, we want to draw our trendlines with crayons, not pencils. We can argue back and forth all day about which of these charts above is the “right” one, but we won’t know until afterwards which one represented the most important resistance.
Gun to my head, it’s the first one where 1800 is a big level. That means it’s already happened. But to think that we won’t see some resistance above 1900 is probably a little irresponsible. We could have a clean breakout, but a sloppy one is more likely.
The trend is still up in Precious Metals.
What do you think? Do you disagree?