(Photo by Mario Tama/Getty Images)
Investment is best kept simple. If you don’t know the direction of a market then you shouldn’t be invested but there is no better investment than one that shouts to you that it is on the move.
I hold gold as a purely diversified investment play. Compared to equities it’s a sluggish dull instrument. That is good. If you want to game the Magnificent 7 that option is always open but a nice chunk of slow grinding asset is something everyone should have.
However, gold looks extremely interesting right now. From a charting perspective it looks at the beginning of a stellar move up.
Her is the extremely bullish chart:
The gold chart: looking very bullish
It has broken out of its equilibrium range.
Let me redraw this chart to suggest why I’m excited:
The long-term gold chart looks exciting
Some might say, “where are the lines, where are your fibs? How about some Ichimoke or some moving averages?”
None of that is needed. This looks like the classic setup for a boom bubble moon sequence.
This is actually a bit worrying because gold is for war. Let’s hope that is not the driver.
Zooming in you can see the break out. You can see that the equilibrium level is constantly breaking higher:
Equilibrium levels on the gold chart
Breakouts are never 100% signals but this action is about as bullish a signal as you will get short of a postcard from the future.
I’m now expecting $3,000 an ounce on the cards, but as the chart implies $4,000 is a possibility.
For me it’s time to see if this potential move is linked to broader markets. That would not be good news, but gold isn’t going to go through the roof for no reason and if that is what is happening the story behind that can be pieced together by looking at other markets.
Disclaimer: I own gold