Has The Gold Bull Run Already Started?

| January 17, 2019

Image by Unsplash

Seems like every day brings an article by another analyst asking if the next gold bull run has already started.  Or is about to…  Your friendly Gold Enthusiast believes it has, but as with the start of all bull markets, one needs to be careful. As the old traders say, everything is timing. Put all your money in too early and you’ll either be dragged down by an early correction or get stuck waiting while it seems everything except what you’re in goes up.

Certainly, the last 3 months’ performance by gold could lead you to believe the bull is started.  But is gold really up, as in WAY UP?  Let’s look at a 1-year chart of GLD, our easy-trading gold proxy, to see.

GLD

(credit: Fidelity.com)

What this chart shows is that gold – priced in US Dollars – has come a long way since the August low.  In GLD terms, it’s up 9.9%.  Not a bad 5-month return, but not setting the house afire in the context of the equity market’s recent upside performance.

As is so often true, the important bit here is hidden in the details.  We tossed in “priced in US Dollars” because analysts have been noting lately that gold is at or near all-time highs in many currencies around the world. Only in a relative handful of “strong” currencies is gold not at or near all-time highs – currencies like the Japanese Yen, British Pound, the Euro, and of course the US Dollar.

Every time this has happened that your Gold Enthusiast knows about, a bull run in gold was not far behind.  It’s definitely time for us to keep an eye on 1300 and then 1400 USD for international gold, with the usual bull market buying strategies.

And a small bonus for those who have read this far.  On the chart of GLD above note that the 200 and 50-day SMAs are close to a bullish “golden cross.”  In this case, the golden cross would certainly earn its name.

Signed,

The Gold Enthusiast

DISCLAIMER: The author is currently long the gold market via small positions in NUGT, JNUG, and a handful of junior mining stocks.  He may add to these positions in the next 48 hours.

Note: This article originally appeared at The Gold Enthusiast on January 15, 2019.

 

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Category: Gold

About the Author ()

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals. Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach. Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"
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