Panning for Gold @ $1,300/oz.

Gold Could “Unwind”, In A Sharp Decline

As far as is known, no other site has identified, gold (GLD) has “changed hands” with the next probable direction, as sideways or down.

That is, until now.

Sometimes, it literally takes years to find anything useful from mainstream financial media. However, you really can’t blame them; it’s not their job to reveal the truth.

By chance, every once in a while, someone makes a mistake and bits of truth, escape.

That may be where we are with the following Kitco NEWS interview, linked here.

It’s worth a half-hour to watch the entire exchange but for us, the real business starts at time stamp: 19:05.

The Overall Gold, Premise:

If the dollar moves sharply higher and the markets move lower (or crash), gold’s response may be a wash-out to $1,300/oz., or lower.

“Changing of Hands” as identified on this site, was mostly intuitive. We won’t know for sure if it was the (real) inflection point until gold resolves itself.

Now, we have another view from a separate party (above), that at least recognizes gold’s downside potential.

With that said, let’s look at gold (GLD), Quarterly

Gold (GLD), Quarterly Chart

There are only two trading days left in the quarter; it’s reasonable to think we’ll get something similar to the un-marked chart below.

The next chart shows the Wyckoff up-thrust (reversal) along with an attempt to move higher (the test) that was rejected; prices continued lower.

The next chart is the one no gold bull wants to see; downside projection(s).

Using a standard Fibonacci tool, we have the above projections.

If there’s a major unwind of gold positions, price could decline to the GLD, 133-area, corresponding roughly to physical gold @ $1,300/oz.

Uncharted & Unprecedented

The caveat: We’re not in any time that’s happened before (other than maybe the collapse of the Roman Empire).

It’s uncharted territory.

We should expect market events to reach never before seen extremes. That would include the potential for a severe draw-down in gold.

The World, Then

If gold gets to the $1,300/oz level, it would easily be considered a buying opportunity.

What if gold keeps going lower, moving below $1,000/oz?

The second projection, targets approximately $950/oz.

What, then?

What if the $1,300 level, was bought by those with means, using both hands … including massive margin (if it’s still available).

What happens if there’s another leg down; then margin calls?

Can’t happen one might say.

Well, oil going negative for the first time in history couldn’t happen either … until it did.

Stay Tuned

Charts by StockCharts

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.

The Danger Point®, trade mark: No. 6,505,279