The August employment report came in at just 235,000 jobs versus the expected 730,000 by economists. Gold jumped over the potential for a weakening economy and delayed Fed tapering. A sustained breakout above $1840 in September would be considered bullish.
GOLD LONG-TERM (MONTHLY): If we are in a similar circumstance to 2004, then a breakout above $2000 in 2022 would support a long-term target between $7500 or $9500 by 2028 to 2032.
GOLD 4-HOUR CHART: Gold (currently $1824.50) jumped after the dismal employment report showing just 235,000 jobs created in August. To support a bullish breakout, prices would have to clear the $1840 area followed by the downtrend line currently near $1880. Dropping back below $1800 in September would promote more consolidation.
GOLD MINERS (GDX) UPDATE
GDX DAILY (15-MONTH) CHART: If GDX stays above $33.00 in September, I see the potential for a Double Bottom (March/August 2021). An advance above $40.00 would confirm a bullish breakout and support new highs in 2022.
GDX DAILY CLOSE-UP: Ending the week above $33.00 would be bullish. However, stiff resistance lies just ahead at $34.25 and then again near $37.00. Sustained upside may prove difficult without a significant increase in investment demand. I think as confidence wanes, gold should begin to respond positively.
On the Downside: Closing below today’s $32.50 gap anytime next week would be bearish and could trigger additional downside.
Our work continues to support an increase in Covid related infections (Delta Variant) into year-end 2021. If the 2020 pattern repeats – Covid should reemerge in the Mid-West (US) starting in September or October.
ISRAEL COVID DATA
Israel has over 60% of its population fully vaccinated, and daily cases are surging. The Delta variant is highly transmissible, and there have been multiple breakthrough cases. The death rate has remained low, but this is still very concerning.
US DAILY CASES
Daily cases in the US are slowly rolling over just below the 200,000 level. It’s important to note that these cases are primarily in the southern states, including Florida and Texas. The trend is setting up for record cases into year-end that could reach over 400,000 per day, in my opinion.
SUPPLY DISRUPTION or QUIET PANIC
Maybe it’s the slowly recovering supply chain, but I’m starting to see shortages (some limits) on basic supplies and bottled water in my area. Also, more people are choosing to wear masks in public. It could be nothing, but on the surface, it feels like the beginning of supply hoarding or perhaps a quiet-panic brewing beneath the surface.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For regular updates, please visit here.
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