Time to Buy Gold?

Time to Buy Gold?

Time to buy gold? Well, maybe not. And so far I have been proven correct.

Gold has made a higher high in overnight trading. However, this is not the place to START buying. Gold is 14 weeks into an intermediate cycle. This is the spot to be scaling out and taking profits as gold is going to be due for an intermediate correction soon. And, gold is not due to bottom until May. That will be the time to back the truck up again.

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72 thoughts on “Time to Buy Gold?

    1. Gary Post author

      It’s been a buy for awhile now. I’m pretty sure the 3 YCL was completed back in February. I’m just waiting for a solid close back above $40 to make an official call. But I’ve been holding long energy positions for a while now.

  1. Alexandru Popovici

    I agree with both conclusions on timing for USX and gold, but what you didn’t mention, Gary is that gold should produce a blow-off before topping in this IC — I’m hunting that up-thrust in gold.

    Stocks should also provide a hand to that move of gold as they will turn lower.

    1. Gary Post author

      I’ve been expecting a marginal break above 1308. That would allow smart money to sell into the breakout as retail traders are panicking into the market expecting the breakout to lead to a runaway move.

    2. RickyBobby

      If someone like Alex (dumbest possible money) just bought gold yesterday, then, sadly, it’s likely time to take profits.

      I thought it might get to $1,400 before a sharp correction but Alex is a great contrary indicator.


  2. Alexandru Popovici

    Walt, this is my reply to you posted in Gary’s prior update:

    “” Walt, if that works for you, then it’s great.
    Personally, I’ve found the hard way that it is not wise [for me] to follow the book, the wise, that it pays to leave room in my trading plan for paradoxes and for the less-likely or even unlikely event (after all a 99% probability is fabulous buuuut….it means that out of 100 events in the same situation there will be ONE EVENT that can be destructive – and I must be prepared for that one or rather for those ones since I deal with probabilities far less generous than 99%).

    A cushion of mistrust is warranted [for me] even if it may come at the cost of losing some pennies of profits. In the long run those lost pennies are insurance fees against “the less likely events”.

  3. Richard

    Gary, I would like to see HUI poke up into 190 area before a corrective move. This would confirm the bullish thesis for me.
    For the energy sector, even though there are many positive technicals, I still don’t like it. It still requires one more repricing.

  4. Richard

    The Dollar is breaking down. At best it pops a little, as the rumor of rate raising occurs.
    But what is the limit of the FED paying interest on excess reserves? Do you think they will raise rates and thus pay more interest on bank excess reserves? Something is out of line here. So I could very easily see a no rate increase, bonds pop a little and then a big mess.
    If we get an intermediate rally in the USD, that changes everything in the current setup.

    1. Gary Post author

      Just based on the current cycle count the dollar will be due to start an intermediate degree rally as soon as the current daily cycle bottoms.

      That should light a fire under the stock market.

  5. CM

    Ok, I like this website. I look at it from time to time; pretty much the only stock site I use. I am probably the dumb money you reference, am not good at timing, and I am not a regular trader. That said, I managed to pick up some EXK a few months back at average cost of $1.31. I like what I have been seeing. It’s not mega money, but it is significant for me. From following you all the last few days it seems I should sell it out around now and think about picking it back up in a couple months, or don’t bother looking and check every once in awhile over the next couple years. Any recomendations? Thanks.

    1. Gary Post author

      If you want to move your trade into the capital gains tax rate then forget about it for the next 4-5 years. Otherwise you can try to time the tops and bottoms but have to pay the earned income rate on your gains.

  6. Jon


    What does the following mean. Jus found the blogspot thanks

    Intermediate degree correction, IC, HUI, YCL (yearly cycle low)

    1. DavidR

      New to this I would also like an explanation, but here is some guesses.

      Intermediate degree correction in this context mean that gold price will fall a little for a short period of time and than spike up and after that fall down to a cycle low. So the correction part refers to the events before the spike occur.

      IC stands fore Intermediate Cycle. That is an cycle within a bigger cycle. Looking at gold from 2011 there is one big down cycle and whithin that cycle there are a lot of smaller cycles, all those are intermediate cycles.

      HUI probably refers to the HUI-index which is the ratio between Amex gold BUGS index and the price of gold. Check out “HUI gold index” at Wikipedia.

      YCL is the lows of the three yearly cycles mentioned earlier. Cant recall seeing the term YCH ,yearly cycle high, but if it is used it should be YCL’s counterpart.

      As stated I’m just guessing so if someone could clarify this that would be much appreciated.

        1. Richard

          Tbonds a breakout in yield of 2.75% should immediately push 2.85% then 3% on the 30YR.
          I don’t see an ICL occuring for awhile. I could see a minor low, but not intermediate. If you are looking for ICL next week, what type of target are you looking for?

  7. Happy Gilmore

    Re. Guaranteed 100-200 percent gains in LABU in May. Aren’t you referring to the 4 for 1 reverse split ? Kind of a spoof for the blog ? The context was advising someone who needed to “study ” more. I think I answered my own question. Smart and funny. Kinda like, “I know what the market will do,…. Fluctuate”

    1. Alexandru Popovici

      yeap, Walt.
      I’ve bailed out from the UGLD trade with an equity loss of -0.17% (bought yesterday when gold was 1266 and sold today with gold at 1259).
      it looks like smart money has started to dump big their longs in gold using the strength lent by a falling USX; today’s break of gold on a diving greenback aint a good omen.

  8. Enoch

    Gary I know you keep saying ICL on gold in May, but if gold say drops 200 dollars this month just for discussion sake. would this significant shake out warrant entry back into the sector? or would you still prefer to wait until May?

    1. Gary Post author

      I trade based on cycle counts. So I won’t reenter until we get in the timing band for an ICL. That isn’t going to be due until May.

  9. Stefan

    Wohoo I’ve already repaired the $25000 damage caused by the DUST ! I moved into KOOTENAY SILVER, a very nice silver explorer imo. Still very very cheap!

    What is your take on Silver Gary, I think it will outperform Gold by a wide margin. We could see silver at $30 in less than a year.

    1. Gary Post author

      Most definitely the big money during the bubble phase will be made in silver and miners.

  10. Stefan

    Ok, sorry “repaired” I’ve not sold any shares yet, the trip in KTN has only just begun.

  11. Rob


    I am in DUST ready for the short. Risk rewards favors being short here. Based on your cycle analysis what is a reasonable expected area for gold to fall to? I am thinking 1180 tops.

    1. Gary Post author

      Personally I think it’s foolish to short. We’ve already seen several traders seriously damage the gains they made on the long side by trying to short.

      I’m not saying that gold is for sure topping here. I’m saying it’s getting late in the intermediate cycle and I’ve made enough at this point to be satisfied with the trade. I don’t need to catch the exact top and squeeze every last penny out of the move.

      Markets go down differently than they go up. The gains on the short side are much smaller than on the long side. This is a lesson it took me a long time to learn. When you think a sector is topping it doesn’t mean you should sell short. It means you need to look around and find something else that is going up.

      Hint hint. Move funds from metals trades over to energy and the general stock market and give the metals a rest for a couple of months.

      1. Rob

        You are right, gains on the short side will be small but the current setup on gold is a high probability short term swing trade. I am preparing to buy gold miners at 1200, 1180 and below to hold till 1400+. Yes oil is a good trade but one shouldn’t chase now. Still waiting for a pullback to buy oil. Thanks for your opinion.

  12. Walt

    Smart Alex :
    You’ll do just fine because unlike most traders , you don’t get wedded to your positions . Good luck

    1. Alexandru Popovici

      Thank you, Walt !
      Things get in line line with your target for SPX=2030, if I remember well –> T-notes have already broken their 50dma while T-bonds are about to do it, i.e. treasuries are about to reach their ICLs which bodes well with the ongoing bull trap in stocks hovering at the 200dma of many indexes and stock market segments.

  13. Alexandru Popovici

    Richard, sorry, I just saw your post.
    I do not have a target per se.

    It was 4 weeks ago that I had set my Trading Plan asserting that I saw treasuries diving into ICL and stocks going higher into a large dead-cat bounce for about 5 weeks, that the ICLs of Ts and the ICH of stocks would be concur in 5 weeks’ time.
    Next week is about the time.

    Everything else aligns now with that vision.
    Now that USX and SPX are mostly negatively correlated since the ICL of stocks in February, USX’ going higher into a new IC also supports the bear vision for stocks and bull for Ts.

    Yesterday I attempted an unsuccessful shorting of stocks; I’ll reattempt it on Tuesday, when treasuries are on day 19 of their DC.

  14. Alexandru Popovici

    Thank you for your post above! yeap, there is mounting evidence, technical and fundamental that we are in a dead-cat bounce that mimics the ushering of a new multi-year cycle simply because we are in a new IC after NYSE broke its 200Wma [on JAN8] –> such breaks have always been followed by strong IC advances.

    and, yes, some day I’ll start studying Elliott too.

    1. Gary Post author

      I would strongly disagree. This has been one of the most powerful rallies in the last 60 years in terms of breadth. Exactly what we should see as stocks are coming out of a 7 YCL.

      Why you guys continue to fight the Fed’s printing press and negative interest rates baffles me. You are making amateur mistakes that you just don’t need to make.

      You are clearly placing these trades with the intent of trying to catch a top so you will have bragging rights, and in the mean time you just continue to lose money.

      Stop this nonsense. Stop fighting the Fed, the PPT and their printing press. Stop losing money.

      If you think the market is going down then just get on the sidelines and wait for a cycle low. Cash is a perfectly acceptable position, and one that won’t cost you money.

  15. Alexandru Popovici

    ….other bearish data today:
    – NYSE’s 52w-high list mostly comprises utilities, cons.staples and fixed income funds !
    – indexes have grown big today on below-average volume …

    closing my computer and going to sleep while resting happy 100% cash 🙂
    Good night Victor, Walt, Chris, Rich!

    1. Richard

      Sounds good. Need to look at gold this weekend.
      I am not sure this time around a stock selloff will correlate to a rising bond price of any significance. Long bond will rapidly go to 2.85% and 3%. Added short here this am. and may add more Monday or at close today. Sounds crazy given negative rate stance in Europe, but if we are coming out of this mess, the US will lead followed by Europe.

  16. Hillarys Cattle Futures

    Gary; If I subscribe to the Premium Service … what specifically do I get? … everything except access to the “Aggressive Portfolio”? … I’m guessing Premium allows full access to the “Model Portfolio”? … and are Model Portfolio’s broken down in different sectors, etc?.

    1. daniele

      You’ll get a daily report (sometimes even a morning report) and week-end report.You can follow the model portfolios in 5 sectors: stock market, gold, energy, currency, bond.
      The best.

  17. atkjhi

    Gary –

    What do you make of silver finally outperforming gold. It would seem unlikely that silver could rally without gold but today is probably the 1st day in months that silver is up when gold is down.

  18. Barney

    Still –
    3x short gold (not going above 1288 imo at this point)
    3x vix
    3x short s&p
    3x short Dow
    Just added
    3x short nasdaq.

    looked in the mirror this morning and just saw an old grumpy bear staring back.

    l am away to hibernate.

  19. Ed

    It was an awful day for gold. I found this interesting chart from investing.com and I am trying to see if it has any special meaning for gold miners apart from gold price.
    I think we are losing context of P&L for gold miners when valuing miners as companies because we automatically consider higher price of gold means higher share prices for miners. I think HFT uses gold price somehow tied to GDX. But every miners have different All In Sustaining Cost (AISC) for their their profitability. Once gold price passes their AISC, one dollar increase in gold price can have a dramatic change in their financial statements.
    This tells me gold miners can do quite well once gold price passes certain thresholds, not really affected by gold price daily fluctuations. I think almost all major miners can be profitable at current gold price over $1,200 where some of these miners unprofitable if gold price stays at $1,100s. So I think we should expect exponential increase in miners’ share prices compare to gold price increase. Should we not consider GDX price performs exponentially better than gold prices once gold price stays above, let’s say $1,200? I would appreciate what is your take on the chart above. Thanks. Have a great weekend.

    1. atkjhi

      That would seem to be conventional wisdom but during the last gold bear market many miners hedged their gold and thus when gold starting rising they made no money because they had hedged gold at much lower prices to stop the bleeding in the bear market. We won’t know if any miners did that this time until future quarters when one would expect them to have large profits if gold is higher, then only to find out they hedged and end up showing little to no profits.

  20. ChrisG

    Spx has a date with 2060 ish. And Mark April 17 on your calendar. FB , Google etc earnings date. Google gonna have blown out earnings. Go check out YouTube’s advertisements. Lots of it now. Market will be fine

    1. Alexandru Popovici

      I try to give my best, Hong!
      It is a difficult period and it is difficult because of me, because it tests my patience – I would like to trade more but since I am a trend trader the market does not leave too much space –> it’s good though the gold and stocks have had a good period.
      Now I’ll check the strength of the wind on shorting stocks.
      I hope the market will trend here too.
      If not, then I’ll cut my losses short anew in search of better winds 🙂

      Good luck, Hong!

  21. Stefan

    FOMC meeting next week, dovish or hawkish. S&P500 indicates a correctional move, a close of the gap sitting at 2040ish.

    Gold weakening? I was too early in my prediction, maybe a correction next week?

  22. Alexandru Popovici

    Morning, Walt 🙂
    Yes, indeed.
    I love thrusting myself into good strength (I dont like bottom fishing at all) and I am extatic about slashing losses very, very short –> my average loss per losing trade in a difficult period like this is -0.44% of my equity !!
    Of course I adjust it so low because my average gain per winning trade is also low, some +0.9%.
    I trade in a cash account – I hate leverage.

  23. Paul

    Hi Gary
    If you are looking at a low in gold in May. Where would that place the price of DUST/NUGT please. In your opinion



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