Gold finally ready to outperform US public debt?
This 80-year chart of gold’s performance against US government debt paints a fascinating picture of gold’s past performance and suggests that a very large move could be taking place over the course of of the next few years. First note that this ratio remained virtually unchanged until 1971, when gold began to trade freely. Interestingly, once the ratio broke free from its descending parallel channel, it performed a backtest near perfect during gold’s bull market retracement in 1976. This ratio began to consolidate as a HUGE wedge after gold’s all-time high in 1980. A fake breakdown (crossing from support to decline) in September 2022 strongly supports the bottom of the 8-year gold cycle, and now the ratio is almost at the top of the wedge. Often, when price is hovering around the top of a wedge pattern, the resulting breakout can then turn out to be impulsive. Given the false breakout we experienced on the downside, the next breakout should be higher.
The gold/US money supply ratio on the launch pad?
The ratio between the price of gold and the US money supply M2 has also created a significant wedge pattern over the past 15 years. He also knew breakdown, but it has already broken the uptrend and is retesting the wedge. This is the price action we expect to see next with the gold/debt ratio. From a technical perspective, this is an extremely healthy bull market. Over the next few years, we expect this pattern to unravel and gold to strongly outperform the money supply, which would mean that gold would appreciate in both nominal and real terms.
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2023-07-11 08:47:15
#Gold #debt #money #supply #United #States #Or.fr
