Given the extreme recent demand in the precious metals markets, this is the first opportunity I have had to reflect on the charts. For those interested in my thoughts on rising premiums and the cause for falling spot metal prices in early March, please refer to the articles linked.
- Following a 20-year bear market, gold began its bull market after 9/11, with price finally retesting the secondary high at $720 before a pullback to the 61.8% Fibonacci retracement.
- Support held there, and a second leg to a new all-time high at $1030 (161.8% extension) commenced before a retest of the $720 level at the 2008 bottom of the Great Financial Crisis (formerly resistance, now support).
- The subsequent bull move took gold to new all-time highs at $1910, stopping perfectly at the 361.8% fibonacci extension.
- The ensuing bear market backtested all the way to the prior peak at $1030 (161.8 extension) before finally breaking above the 261.8 extension in August of 2019.
- Since August, gold has peaked at $1700, and the recent liquidity driven sell-off has simply backtested the breakout at $1450 (261.8 extension), where we have seen a powerful and historic rally this week of over $250 in two days.
As always, we look forward to your feedback. Be safe out there!