The Gold Bull Market Is Back

When the price of gold moves in one direction across a basket of currencies, then we can find the direction of the actual gold market.

The gold price is a complicated beast. It’s like a seesaw, with the yellow metal sitting on one seat.

But instead of one seat across from it, there are several, because each country has its own currency. Those currencies go up and down with regard to each other.

Years ago, a brilliant analyst found that you couldn’t use any single currency to figure out bull or bear markets for this commodity. Instead, we needed to use the price of the precious metal in a basket of currencies.

If the price of the metal moved in one direction across all those currencies, then we could find the direction of the actual gold market.

With Gold, Look Beyond the Dollar

We know that the price of gold is up in U.S. dollar terms, as you can see in the chart below:

gold-price-us-dollarsAs we can see in the chart above, the metal hit its highest price since October 2016. This certainly looks like it is in a bull market. But is that enough to actually dive back in if you’ve been sitting on the sidelines?

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The U.S. dollar is also weakening against other currencies and could be skewing the appearance of gold’s movement.

To determine if this is a real bull market, we need to look at the price in terms of a basket of currencies.

The chart below shows the gold price in six currencies: U.S. dollar, British pound, Chinese yuan, Japanese yen, the euro and the Swiss franc.

When the price of gold moves in one direction across a basket of currencies, then we can find the direction of the actual gold market.

What we can see is that the price of the metal rose in all six currencies since its low in July 2017.

That means we are in a bull market. It’s time to buy gold and related stocks. A few examples of interesting miners that you should be considering were mentioned in my article “An Opportunity to Cash in on Gold Miners.”

Good investing,

Matt Badiali
Editor, Real Wealth Strategist

  • jrj90620

    You sure summed up that question.Hope you’re correct.

  • SunshineandFleurs

    What about silver?

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  • Thomas Waldenfels

    Okay, but people just need to know that what really moves this market is paper gold trading in New York, and that’s controlled by the gold cartel … the bullion banks, JPM, HSBC, Citi, et al and the government / central bank collaborators who give them their marching orders … the BIS, the Exchange Stablization Fund, etc.

    Prices can rise based on fundamentals and spec fund buying (managed money) … and be snuffed out in the blink of an eye by an orchestrated bear raid or series or bear raids with tens of toms of “gold” contracts being sold naked short in the wee hours of the morning when the order stack on the buy side is as thin as it gets.

    It’s happened so many times, it’s become a joke … just not a very funny one.

    Bottom line: Don’t assume anything much about future prices by looking at charts. Charts don’t matter much outside a very short time window in a manipulated market, and since the bad guys are in on an almost daily basis either driving the price down or capping any rise, I mean very short.

  • John Audie

    Buy CEF – Gold ETF. It’s bottomed out and the only way now is up. I would say 20% in metals is a good bet.

  • Martin “silverfish” Lemona

    buy physical Gold and stay away of paper contracts. There are too many great crypto currencies that are in a mega price boom, never before did we have it this easy.