Gold Trading: Gold/Metals Poised for 1Q ’22 Surge; Solar & War Cycles Concur!
01/04/22 INSIIDE Track – “2016 – 2021 underwent another major economic shift and accompanying Currency War in line with the 40-Year Cycle of Currency Wars that has repeated since before the founding of the USA.
As described throughout the 2010’s, that cycle was expected to usher in a heightened battle against US Dollar hegemony around the globe and likely result in a new reality that would subsequently unfold in the 2020’s.
2016 – 2021 was forecast (in 2013 – 2016) to possess some subtle & some not-so-subtle ‘battles’ with a primary one projected to unfold between the US Dollar (fiat currency) and Gold (hard currency) – with Gold forecast to gain progressively throughout 2016 – 2021. At the same time, a third combatant entered the fray – digital or crypto-currency.
Even though the US Dollar Index – an index that reflects the Dollar’s perceived value versus a basket of other fiat currencies (the healthiest or least healthy horse in the glue factory) – was projected to rally from 2014 into 2017, Gold was forecast to enter another multi-year bull market in 2016 & stretch that into 2021.
The Golden Year
The synergy of cycles in 2016 was so significant that three years of articles, interviews and publications were devoted to discussing the impending bottom in Gold and why 2016 would usher in a new reality – dubbing 2016 as The Golden Year (‘The Golden Year’ – described throughout 2013 – 2015 – was the year when a new ~5-year advance would begin – see insiidetracktrading.com/wp-content/uploads/2018/07/ 2016-the-golden-year.pdf).
That Gold forecast was also tied into Solar Cycles (2020 – 2024), impending War Cycles (2021 – 2025) and Disease Cycles described in 2009 – 2014 (that projected a major viral or disease outbreak for 2019 – 2021 – see insiidetracktrading.com/wp-content/uploads/2020/04/ 2016-The-Golden-Year-III.pdf).
Gold & Economic Cycles
As it turned out, Gold bottomed in Dec. 2015, fulfilled almost everything written about 2016 (The Golden Year), and advanced into the final half of 2020 before peaking. That powerfully fulfilled the latest phase of this 40-Year Cycle of Currency Wars while ushering in the time (2021 – 2025) when the onset of a literal military conflict is cyclically likely.
2021/2022 ushers in a new cycle, with the opening years often the most dramatic (transitions are always the roughest period before a new, or revised, ‘norm’ begins to take hold). One need only look at the early 1820’s, 1860’s, 1900’s, 1940’s & 1980’s to verify this pattern. In many cases, those transitions also began new economic upswings… so they were not all bad.
2022 has the potential for some intriguing parallels and also some stark contrasts to that pattern. Part of that has to do with the principles governing cycle analysis and Hadik’s Cycle Progression…
40-Year Low-Low Cycles
In the first half of the USA’s history (roughly from 1780 – 1900), the movement of Gold swung similar to that of the economy. Stable and dependable Gold usually coincided with a stable and dependable economy (more or less). Conversely, panics in Gold (like 1869) led to panics in stocks.
Since ~1900, the correlation has been inconsistent. However, 2016 – 2021 was similar with both moving higher throughout that time frame and both suffering sharp setbacks in March ’20. In order to better understand what is expected for the coming years, it is important to review a related 40-Year Cycle that has timed pivotal lows in the US economy…
1782 – Start of new country (and financial system) after end of Revolutionary War (Treaty of Paris drafted on Nov 30, 1782; peace negotiations began in April 1782); first American commercial bank is opened and a new monetary system begins to take hold after the collapse of the Continentals (paper currency).
The chart above provides a broad illustration of the economic growth in America in 1700 – 1850 with the two intervening low points spread exactly 40 years apart (surprised?) – in ~1782 and ~1822.
1822 – Follows Panic of 1819 and recession of 1819 – 1821, one of the worst in US history. It included mass unemployment and plunging property values that bottomed in 1822. However, there were far-reaching ramifications of that Panic, particularly the heightened skepticism of paper money that it raised among the American public. That is why Gold’s movement synced with the economy. To quote:
“The national bank’s reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a protracted recession with mass unemployment and a sharp drop in property values that persisted until 1822.
The financial crisis raised doubts among the American public as to the efficacy of paper money, and in whose interests a national system of finance operated. Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the BUS in the 1830s. The national bank was in general disrepute among most Americans..” (wikipedia.org/wiki/Second_Bank_of_the_United_States)
1862 – Start of NY Gold Exchange; Along with stocks, gold rallied into 1869 (coincided with one of greatest bull markets in US stocks in 1860 – 1872)before Black Friday and a gold & stock crash surrounding an attempted corner on the gold market.
1902 – Stock market enters new advance following Panic of 1901 (attempt to corner Chicago rail market) – a sequence similar to what has played out in previous cycles as in 1822, following the Panic of 1819.
1942 – Stock market enters new advance following 1929 – 1942 bear market and 1937 – 1942 crash – setting one of its most significant lows in the 20th century (and the onset of one of the strongest advances).
1982 – Stock market enters new advance following 1966 – 1982 consolidation that included 1966 – 67 sell-off, 1973 – 1974 (50%) crash, 1976 – 1978 (~29%) decline, 1981 – 1982 (25%) drop – setting perhaps the most significant low in the 20th century (and the onset of the strongest overall advance).
While this might normally be perceived to [reserved for subscribers]…
Gold & Silver remain above the lows set in late-Sept – when they fulfilled a myriad of cycle lows including Silver’s ~6-month high (Sept ’19) – low (Mar ’20) – low (Sept ’20) – low (Mar ’21) – low (Sept ’21) Cycle Progression.
While bottoming in late-Sept, Silver completed a 50% retracement of its entire 2020 – 2021 rally, reinforcing a developing range trading pattern with 21 – 21.50/SI as the midpoint and likely support (the 2015 – 2020 range was between 12 – 21 and the ensuing July ‘20 – Sept ‘21 trading range between 21 – 30).
That combination of cycles & price objectives portended a 3 – 6 month bottom. It was forecast to spark an initial rally into late-Oct and ultimately into Nov 15 – 19, when Gold cycles projected a multi-week top. Gold & Silver fulfilled that and, in the process, projected a future peak for Jan 3 – 7 – the ensuing phase of a governing 7-week cycle AND a ~5-month/21 – 22-week low-high-(high) Cycle Progression.
In the interim, they corrected to pivotal support levels at ~1760/GC & ~21.50/SI and bottomed in mid-Dec. On Dec 17, they generated outside-week/2 Close Reversal buy signals – projecting [reserved for subscribers]…
The XAU & HUI are following a similar cycle path, setting highs on Nov 15 – 19 that projected future peaks for Jan 3 – 7 and Feb 21 – 28, ‘22. They are spiking higher into Jan 5 – testing their declining weekly 21 High MACs (~133.80/XAU & ~258.50/HUI) and could set a 1 – 2 week (or longer) peak at any time. Looking out a little farther, the second half of April is the convergence of 5 – 5.5-month & 10 – 11-month high-high cycles that could time a pivotal peak.
Platinum set its lowest weekly close on Dec 3, perpetuating a ~10-week high-low-low-(low) Cycle Progression while preventing its weekly trend from turning down. It set an intra-week low in mid-Dec during the 3rd week following a test of its weekly HLS (a 1 – 2 month low usually takes hold within 3 weeks of that occurrence).
That showed Platinum had stretched to its extremes without turning the trend down – setting the stage for a surge into [see latest publication for updated outlook and analysis]…
Palladium could also be setting a multi-month bottom as it just completed successive declines of equal magnitude (~1,400/PA drops in Feb/Mar ’20 and again in May – Dec ’21) while again holding its previous (Mar ’19) high near 1600/PA.
That decline also had Palladium retracing to its multi-year 4th wave of lesser degree support – the low of March ’20 that preceded the culminating wave ’5’ rally into May ’21 (that 5-wave sequence began with the low of Jan ’16).
That level is both the primary downside objective for a correction of this magnitude AND the support from which a new advance could take hold. At the same time, Palladium also spiked to its weekly HLS and reversed higher – initially indicating a multi-month low was taking hold.
On a 1 – 2 year basis, the next multi-quarter peak is most likely in 3Q ’22 – the fulfillment of a ~15-month high-high-(high) Cycle Progression. Longer-term cycles converge in 1Q ’23 – including the next phase of a ~7-year low-low-(low/high?) Cycle Progression.
Copper remains in the midst of an overall advance… Until a weekly close below 3.9000/HG, however, it remains on track for a retest of its ~4.9000 high.”
Precious metals slowly advancing, reinforcing outlook for major rallies in 2022. Gold remains on track to see a surge to 1913 – 1920/GC (if not higher) into late-Feb ’22 and should see new surge in Feb ‘22. Silver is showing that this rally should stretch into March ’22 – the next phase of its ~6-month Cycle Progression.
The XAU & HUI are revealing why that should be followed by another rally into late-April ’22… even as Platinum & Palladium are showing that major lows just took hold in Dec ’21. Decisive advances are projected for 1Q ’22. Copper is fulfilling multi-year upside objectives (and could peak in 1Q ’22).
What Could Trigger Major Rallies in the Entire Precious Metals Complex?
How Do Solar & War Cycles Fit into this Outlook?
Will Dollar Index Surge with Gold… Again??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.