Gold to Surge from Coronavirus, Tanking US Yields and Poor Data
As per many of my ideas dating back well before anyone else spotted the impending rally - infact dating back before Christmas - we have clearly broken out in Gold. So whats next?
Firstly to note - the coronavirus. This virus has been grossly underappreciated in the equity market. In fact, this will not only demolish at-least Q1 of China's GDP and a huge portion of the supply chain world-wide, but, this will likely have lasting impacts for Q2 and perhaps even Q3 as well. This will drive economic data down, yields down and further increase central bank liquidity. This is ultimately extremely bullish for Gold and Silver.
Secondly, as hinted at above, the US yields have severely broken down and to the downside. In fact it is not out of the question in the near term to see the US 30 year at 1.75 and the US 10 plummet to 1.00. While not a necessity for Gold and Silver prices to rise, the lower and faster they fall, the more parabolic Gold and Silver will become.
Finally and surprisingly to the market, US PMIs continue to show weakness (and today's data was BEFORE the coronavirus). The PMIs today came in at contraction and well off the predicted normal. In fact at this point, US PMIs are showing more weakness than other portions of the industrialized world despite what the ridiculous Larry Kudlow tries to portray on CNBC.
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My 'bear' case for Gold was a break-out to ~1730 in this 'next leg up' before April 1st. However, with the coronavirus perhaps becoming a pandemic, US yields plummeting to all-time lows AND US economic data weakening even still, there is a distinct possibility Gold could go into the 1800s. In fact, I place that during this current leg a 60-65% chance Gold could go over 1800 before a more meaningful correction.
If on top of the assumptions I noted in the paragraph above are coupled with Powell cutting rates in March (which would point to weakness in the DXY) and/or a meaningful US equity correction (5%+) the chances of over 1800 in this current leg up would exceed 80%.
In my opinion the equity market is nearing a correction and showing significant signs of weakness. I would not be surprised to see a 5% correction over the course of the next few weeks in the market and given the blow-off top and 'bubble-like' nature of the markets, as well as, the state of US yields, economic data and the virus, a 10% correction cannot be ruled out spread out over the next 2-4 weeks.
--
For the Silver bugs out there like myself wondering when Silver will make a move - the answer is perhaps as early as next week! Silver is currently forming an elongated base-line and we can expect a parabolic move into the 23-24 range as an inevitable likelihood.
--
I invite you to look at many of my ideas from the past and note my consistency. I noted several 'leg ups' several months before anyone else to near perfect accuracy.
Thank you for your support.
*Note: Only the general trends are shown. Nothing moves in a straight line.
zSplit
Firstly to note - the coronavirus. This virus has been grossly underappreciated in the equity market. In fact, this will not only demolish at-least Q1 of China's GDP and a huge portion of the supply chain world-wide, but, this will likely have lasting impacts for Q2 and perhaps even Q3 as well. This will drive economic data down, yields down and further increase central bank liquidity. This is ultimately extremely bullish for Gold and Silver.
Secondly, as hinted at above, the US yields have severely broken down and to the downside. In fact it is not out of the question in the near term to see the US 30 year at 1.75 and the US 10 plummet to 1.00. While not a necessity for Gold and Silver prices to rise, the lower and faster they fall, the more parabolic Gold and Silver will become.
Finally and surprisingly to the market, US PMIs continue to show weakness (and today's data was BEFORE the coronavirus). The PMIs today came in at contraction and well off the predicted normal. In fact at this point, US PMIs are showing more weakness than other portions of the industrialized world despite what the ridiculous Larry Kudlow tries to portray on CNBC.
--
My 'bear' case for Gold was a break-out to ~1730 in this 'next leg up' before April 1st. However, with the coronavirus perhaps becoming a pandemic, US yields plummeting to all-time lows AND US economic data weakening even still, there is a distinct possibility Gold could go into the 1800s. In fact, I place that during this current leg a 60-65% chance Gold could go over 1800 before a more meaningful correction.
If on top of the assumptions I noted in the paragraph above are coupled with Powell cutting rates in March (which would point to weakness in the DXY) and/or a meaningful US equity correction (5%+) the chances of over 1800 in this current leg up would exceed 80%.
In my opinion the equity market is nearing a correction and showing significant signs of weakness. I would not be surprised to see a 5% correction over the course of the next few weeks in the market and given the blow-off top and 'bubble-like' nature of the markets, as well as, the state of US yields, economic data and the virus, a 10% correction cannot be ruled out spread out over the next 2-4 weeks.
--
For the Silver bugs out there like myself wondering when Silver will make a move - the answer is perhaps as early as next week! Silver is currently forming an elongated base-line and we can expect a parabolic move into the 23-24 range as an inevitable likelihood.
--
I invite you to look at many of my ideas from the past and note my consistency. I noted several 'leg ups' several months before anyone else to near perfect accuracy.
Thank you for your support.
*Note: Only the general trends are shown. Nothing moves in a straight line.
zSplit
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