Gold bottomed last week in line with our 40-Day Cycle Forecast.
THE 40-DAY GOLD CYCLE: Below you will see gold switched from cycle highs every 40-days (red arrows) to forming cycle lows (green arrows) at the March bottom. We just completed the first 40-day low in a new upcycle, and the trend is set to accelerate once gold retakes $1800.
The 40-day cycle in gold bottomed last week on day 37. Slightly early but not surprising given the previous cycle extended to 42-days. The next 40-day low isn’t due until late June, so there is plenty of room for upside. Overall, gold should climb its way back to test the $2000 level by July or August.
GOLD MINERS (GDX): The 40-day cycle bottomed in line with our expectations. The next low isn’t due until late June, so we have plenty of room to run. I’d like to see a bullish recognition day in miners sometime this week. That will likely occur when gold convincingly retakes $1800. Overall, miners should test and perhaps reach fresh highs in the coming weeks.
Note- A bullish recognition day is when the market collectively acknowledges a trend change. Traders looking for lower prices exit shorts and immediately switch to longs. In GDX, this usually looks like a robust 5%+ up day on big volume.
It’s not too late to position for the next leg higher in precious metals. We are only on day one of a new 40-day cycle. Silver and miners have the most near-term potential, in our opinion.
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 more information, please visit here.