Note: The S/R levels (i.e. likely bank trader order levels) as depicted in their respective timeframes in this and prior articles have not changed, and will probably NEVER change regardless what happens in financial markets. What follows is my own world view, developed from an institutional trading career dating back to 1995.
According to an opinion piece we read recently, gold is already four years into a 10-year bull cycle, with the ultimate target of USD 8000.
XAUUSD is now circa $1470.
The article based this projection on 2 past bull cycles. Gold went from $35 to around $650 from 1971 to 1980. And then gold went from $250 to around $1850 from 2001 to 2011.
Notwithstanding Nixon’s abandonment of the gold standard, there were underlying factors during those 2 prior periods that made gold a viable safe haven.
There were record debts and deficits, sky-high debt-to-GDP ratios, near-zero interest rates, emergency liquidity interventions by First World central banks, confidence crises in governments worldwide, geopolitical unrests and international tensions, a general climate of de-dollarization, slowing economic growth that we’re now also seeing in China, and a host of other problems.
The article argues that those underlying factors are even more acute today, more than ever.
Is the fiat money system really on the way out in favor of something like gold-backed money, or even cryptocurrency?
Time will tell.
In the meantime, here are our S/R levels for gold for the rest of the week.