Gold (GLD) Hits Target … 166

Bring out the usual suspects.

Last month, March 13th, had this forecast for GLD, to retrace at least to 166-area; a Fibonacci 23.6%, level.

So, here we are.

GLD closed last Friday, at 166.35 … close enough.

Before we get to the chart analysis, we have the following summary from the video link in the header line:

‘We were seeing some noticeable improvement in the economy … especially in the U.S. as the [speck protection] took hold.’

(time stamp 5:03).

‘Taking hold’, indeed.

We can see just how well that’s going, here, here and here … adding to a very long list.

Before we leave this topic, we have entire school districts being shut down from speck protection reactions.

Let’s extrapolate that into ‘entire grocery chains shut down’, or ‘entire air transport companies shut down’ and the picture is clear.

By now, anyone with two lipids rubbing together can see the false narrative has reached beyond absurd into a completely different realm.

We’ll just have to call it the ‘Twilight Zone‘ for lack of a better description.

All of this will affect the markets … gold included; probably in ways unknown at this point.

Analysis:

So, here we are at the 23.6% retrace. What’s next?

First off, 23.6% is very weak. It’s not typically seen as the final (upside) reversal point in general market behavior.

However, if GLD does reverse from here, posting new daily and weekly lows, it’s in serious trouble.

The next chart has GLD in a downward channel that’s been in-effect since last August.

Pulling out to a longer time frame … the monthly; using a Fibonacci projection from these levels we have some interesting price targets.

Frist, is the 1:1, or 100.0% – 100.0% on the Fibonacci tool that projects GLD down to about 130 (129.64). This just happens to be the area Steven Van Metre has been discussing (as a potential target) for months.

Moving on lower to the 69.25 area for GLD, are targets mentioned by Harry Dent … albeit, years ago (actually, it was below $400).

We should keep in mind, a Fibonacci retrace of 76.4%, from all time high to cycle low, 1999/2001, is the 64-area on GLD.

Getting below $400 at this juncture seems unlikely.

Summary:

A downside reversal off 23.6% retrace would signify substantial weakness.

GLD would have to push below last week’s low of 161.81, to increase probabilities of a sustained downside move.

Stated many times on this site, precious metals are a crowded trade.

Operating at the same time, adverse reactions (and death) being caused by speck protection. A massive number of the population is subject to being permanently debilitated.

That could feed into the availability of all items; gold included but more importantly, the food supply.

To wit, CORN has just pivoted to the up side in a new trend; rising at over 437%, annualized.

More on that, later.

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.
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