7-Year Cycles Can Be Powerful and Gold Just Started One
The comments below are an edited and abridged synopsis of an article by Chris Vermeulen
Vermeulen’s research and predictive modeling systems have nailed gold over the past 15+ months. He expected it to rally above $1,750 before the end of this year, but global trade wars and news cycles stalled the rally. Now, however, it appears that gold is poised for another rally, and getting ready to push much higher.
Gold broke down from a bull market in 2012/2013, nearly 7 years ago. Now, it has broken resistance near $1,375 and is technically in a bull market. The importance of this is the 7-year cycle and how the rotation in gold, between the high near $1,923 and the low near $1,045, represent an $878 price range. The upside (expansion) rally in gold may move in expanding Fibonacci price structures, just as it did from 2005 through 2012. If this is the case, then we can expect to see an ultimate peak price in gold well above $3,500.
The rally that started in 2015 and ended in July, 2016 totaled +$331.1 (+31.67%). The next price rally (August 2018 to 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 $1,923 target level?
Up for discussion: Bull and bear market trends, and the monthly price of gold; the US dollar will start to support higher gold prices; gold mining stocks; and concluding thoughts.