FX Empire: 7 Year Cycles Can Be Powerful and Gold Just Started One
Article by Chris Vermeulen in Yahoo Finance
We expected Gold to rally above $1750 before the end of this year, but the global trade wars and news cycles stalled the rally in Gold over the past 2 months. Now, it appears Gold is poised for another rally pushing much higher.
But wait, if you’re thinking I’m just another one of those traders who is always bullish on gold, just know I have been telling the truth about where gold was headed (lower) for years, but finally, the tide has changed!
Gold broke down from a bull market in 2012/2013 – nearly 7 years ago. Now, Gold has broken resistance near $1375 and is technically in a full-fledged Bull Market.
The importance of this is the 7-year cycle and how the rotation in Gold, between the high near $1923 and the low near $1045 represent an $878 price range. The upside (expansion) rally in Gold may very well move in expanding Fibonacci price structures – just like it did in 2005 through 2012. If this is the case, then we may expect to see an ultimate peak price in Gold well above $3500.
The rally that started in the last 2015 and ended in July 2016 totaled +$331.1 (+31.67%). The next price rally that started in August 2018 and ended in September 2019 totaled +$399.4 (+34.22%). If we take the current rally range (399.4) and divide it by the previous rally range (331.1), we end up with an expansion range of 121%. The two unique rallies that happened just before the 2009 parabolic rally in Gold represented (+315.8: 2006) and (394.8: 2008). The ratio of these two rallies is 125%. Could Gold have already set up for another parabolic rally well beyond the $1923 target level?
To read this article in Yahoo Finance in its entirety, click here.