Gold price will recover versus Bitcoin, 19 March 2021
Gold Price Forecast relative to
Long Term Monthly (LT-M) - Medium Term Weekly (MT-W) - Short Term Daily (ST-D) - and Hourly (not shown) data.
(Previous week in brackets)
|Au Trend||↓ (↓)||↑ (↓)||↑ (↑)|
|Au % Risk
|55 (54)||13 (10)||65 (32)|
Total allocation 50% (55%)
Physical Gold: Nature's currency
19 March close: Gold has a estimated market cap of between 10 and 13 Trillion dollars, Silver 1.3T, Platinum $700 Billion and Palladium 80 Billion Crypto market Cap rose from 500 Billion at the start of December 2020 to the current $1.8 Trillion. Some of that 1.3 Trillion increase has been speculatively transferred from Precious metals. Except Palladium which is very expensive and has pure commodity value. These numbers are big and explains the massive and continuing price divergence between Precious metals an crypto and in particular Bitcoin. The Medium term and Long term risk weight trends in Gold still look very bullish as the super cycle has yet to finish and with strong investment inflation signals becoming a real issue for world markets. Monthly Long term risk weight has moved up a notch whilst being in a corrective downtrend. That may also be a technical hint that the medium term Weekly risk trend, as it turns up, will drag Monthly risk up with it. Technically we favor the metals look over Bitcoin at this moment. Other selectively chosen crypto's can be a different story. Gold remains a strong balanced hold in our portfolio. Based on strong fundamentals with full technical analysis support.
12 March close: This is a corrected publication to include the March 12 close comment and corrected figures above which were erroneously omitted earlier.
Gold/USD had a Friday London fix at 1704.80 and closed $20 higher at 1724.90.
Gold and precious metals generally have not been in Vogue of late. Attention was much more focussed on crypto and equities. The rally late last week looks weak technically with hourly risk already in an overbought condition. Daily is in a weak uptrend which could easily turn down again for another attempt to crush the price. Weekly at 10% is in a low risk range. Broadly Gold looks suspicious and could experience another drop into the 2019 support zone around 1500. The support argument for Gold is two-fold. 1, Daily risk has shown bullish divergence with an evenly risk weight bottom at the February and March lows, where the recent March price low was $200 lower.
2, Monthly risk weight should be expected to develop bearish divergence in virtually all trading tools at the end of a major trend. That hasn't happened yet. Finally precious metals should still be targeted to reach our medium term chart objectives, because that is the historically most likely scenario. Our cushion is substantial enough to stay fully committed to precious metals, simply because the inflation ghost is on our back. That is a dangeous enough scenario to keep our wealth preservation hedge alive against short term technical odds which do give mixed signals. As we discuss in our Silver blog, we may swap just a little bit of silver for Gold and Platinum if the Gold/Silver ratio drops into a short term oversold condition in the early part of the March 15 trading week. We have chosen to be very patient without trying to top pick, bottom pick or get nervous during these times of sometimes irrational market behavior. No Change for now.
19 March comment
The current risk weight downtrend at 68 is still expected to show bearish risk to price divergence down the road. That road could be 2 or 8 quarters or more, but through the times this is the most realistic scenario to expect if a major uptrend cycle is finishing. The question is: to which elevated levels will the market eventually take the price Gold as a result of MMT?
Gold/Euro live price
19 March 2021 close: This pair, now at €1465, looks firm er too having bottomed around 1410 2 weeks ago. Same core hold for Euro tax based investors.
12 March 2021 close: Gold vs Euro did develop bullish risk weight divergence in the Daily time scale which may be indicative of a bit more dollar strenght in coming weeks. Otherwise the technical picture is very much the same.
Gold/British Pound live price
19 March 2021 close: Gold vs GBP looks to develop its strongest monthly close in 8 Months. We consider this a possible supporting signal that GBP's advance against most other currencies is coming to an end. Yet the same structural Gold market technical analysis applies. No Change holding a strong core Gold allocation for GBP tax based investors.
12 March 2021 close: GBP has the same risk weight development turning up sharply in the short term time scales whilst Weekly is also turning up at around 7% risk. This is a confirmation and slightly more bullish signal for Gold.