I see traders everywhere worrying about how the Brexit vote will effect gold. Folks, forget about the Brexit. By this time next week the Brexit will already be fading into memory and the market will go back to doing what it was doing before the vote.
gold vs. brexit

Gold is rallying out of an intermediate cycle low. Gold has completed its bear market and is starting a new bull. Intermediate cycles in bull markets don’t top for at least 14-18 weeks. So quit worrying about a top in gold until August or September ad quit paying attention to the clueless analysts trying to tell you otherwise.

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14 thoughts on “CHART OF THE DAY – $GOLD vs. Brexit

  1. vanbc

    It is not doubt gold is on bull market. but current price action is daily cycle pull back or intermediate cycle pull back? that is a problem?

    1. Gary Post author

      Gold should just dip into a half cycle low but if the dollar continues to collapse that may not even happen.

      Right now gold is trying to break through the 200 week moving average. This is for all practical purposes the bears last stand. Once that breaks it’s good night for any remaining shorts.

  2. humbled

    indeed Brexit has been a ‘distraction’ to gold. Thanks Gary for bringing us back down to earth.

  3. heybuddy

    Gold and silver are usually in a seasonally weak period for the next month or so; commercials continue to hold massive short positions and numerous miners showed up on the SOS list Friday. Should all of these just be ignored?

    1. Gary Post author

      Look at what happened during the last baby bull in 2009 & 10. Sentiment can get as high as 90% during a new bull phase, and it can stay elevated for long periods of time, backing off during DCL’s and then surging again during the next leg up.

      I expect gold will be volatile over the next month as stocks make new highs, but with the dollar collapsing it’s going to be impossible for gold to get any real downside momentum. And once the market recognizes that the dollar is in real trouble then gold will produce the next leg up (to at least 1400 and maybe 1550).

  4. humbled

    it appears that we have to wait for Brexit to get over conclude and dust settles then for dollar to round over and head south

  5. chrisG

    Gold is tanking. I think the higher probability is gold heading for 200sma, back to 1220 ish. Gdx testing 200 Ema.

    Gary’s gonna be wrong on this aspect.

    1. Gary Post author

      I doubt it. Gold is just dropping into a half cycle low, but once the dollar collapses, which it will do on a stay vote, then it’s going to be impossible to keep gold down.

      1. chrisG

        Gary, maybe with a stay vote, gold being a Brexit insurance, could just tank into 200 sma. In the past, during gold drop into fib retracements, it has drops more scary then the one last month. Doesnt smell right.

  6. chrisG

    Throughout this initial leg, gold had not have a $50 drop. That’s not how gold behaves. It has to make a scary drop

  7. Don

    Gary, your favorite sector, the biotechs, are giving you some great entry points for your long term hold. You must be ecstatic. Me, am glad I got out out of XBI on June 3rd at $58.50 with a minor $80 loss. The draw down would be almost $600 now. The suckers holding LABU are getting slaughtered. And yes Gary, I know we are supposed to hold for years for the big win that is coming in the Biotechs (although you have jumped in and out yourself). I guess one could apply that thinking to just about any sector. I fully expect you will delete my commentary just like you do to so many other critics.

    1. tulip

      you are confused…Al Korelin does that, he cannot deal with any criticism or differences politically.
      Gary has as far as Im concerned has been very tolerant and even welcoming to critics & skeptics.
      TRolls thankfully get short shrift…

  8. chrisG

    Gdx couldn’t make much headway recently. I still believe it’s high odds is a drop to 200 ma. Just like gold. Let’s see

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