WHEN WILL GOLD SHINE AGAIN ?
FUNDEMENTALLY SPEAKING:- INVESTORS FOUCS ON NUMERUOS FACTORS THAT DRIVE THE PRICE OF GOLD. LIKE SUPPLY AND DEMAND,UNCERTAINTY IN THE MARKET, AND ONE OF THE LESS OBVIOUS BUT SEEMS TO HAVE MORE PREDICTIVE POWER OVER THE LAST DECADES IS REAL YIELDS( U.S.INTEREST RATE MINUSE ANNUALIZED CONSUMER PRICE GROWTH). AS THE REAL YIELD DECLINES GOLD OFTEN RALLIES , AND WHEN THE REAL YIELD GOES NEGATIVE GOLD BECOME VERY EXCITED. LOOK AT THE DIAGRAM NO (1) IT SHOWS THE PRICE OF GOLD VERSUS THE US REAL YIELD AS MEASURED BY THE 3 MONTH TREASURY BILL RATE MINUS THE ANNUALIZED GROWTH RATE IN THE CONSUMER PRICE INDEX . WE CAN SEE THAT WHEN THE REAL YIELD IS NEGATIVE AND STILL DECLINING, THE PRICE OF GOLD HAS
TENDED TO RALLY, BUT LOOK WHAT HAS HAPPEND WHEN THE REAL YIELD HAS DROPPED BELOW MINUS 3% AND THE EXTREM LOW HAS COINCIDED MOR OR LESS WITH A PEAK IN THE GOLD PRICE AS THE 2011-2012 PERIOD WHEN REAL YIELD WENT BELOW -3% PUSHING PRICE OF GOLD INTO THE $1800 RANGE
BUT AT EXTREEM NEGATIVE LOW LIKE -5% OR MORE THE PROBABILITY IS HIGH THAT A LOW IN REAL YIELD IS NOT TOO FAR AWAY. THE GOLD PRICE HAS ALREADY BEEN DECLLINING , PERHAPS ANTICIPATING A MOVE BACK UP IN THE REAL YIELD, THAT MOVE COULD COME ABOUT BY AGGERSSIVE FED TIGHTENING MONETARY POLICY AMID SOLID RISES IN COMSUMER PRICES INDEX AND SUPPLY CHAIN DISRUPTIONS
TECHNICALLY SPEAKING : OUR MAIN COUNT SUGGESTING THAT WAVE (3) IN GOLD APPEARS TO HAVE PEAKED AT $2075 HIGH, THEN WE ARE ALLOWING FOR TRAINGLE TO UNFOLD AS WAVE (4) .COMPLETING THE TRIANGLE INDICATES A THRUST HIGHER IN FIVE WAVES FOR WAVE (5) TO MAKE ANOTHER ALL TIME HIGH ABOVE $2075 .
BEARISH ALTERNATE ,WILL TAKE PLACE WHEN PRICE BREAK BELOW THE CRUCIAL SUPPORT AT $1680
