Gold should be 10%-30% minimum portfolio allocation | 14 May 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)
|1841 (1831) (unch)
|Au Trend||↑ (↓)||↑ (↑)||↓ (↑)|
|Au % Risk
|48 (47)||65 (54)||80 (80)|
Portfolio allocation 35% (30%)
Physical Gold: Nature's currency
14 May close: One week ago Finnish CB chair and ECB member Olli Rehn repeated his view to let inflation run (well) above official target, thus without raising interest rates. It basically means that real rates will be even more negative without there being a history for diagnose of future economic consequences. A minimum of between 10 and 30% Gold allocation therefore remains the key asset to protect 80% of total assets if financial markets decide to take a dive. Our current Gold, Silver and Platinum allocation has risen to 35% from 30% due to this week's drop in crypto. The key longer term risk weight indicators for Gold/USD above still confirm that Gold has further to go. Strong Hold. No change to the allocations of Gold, Silver and Platinum.
We will hopefully update our other pairs within the next few days. Crypto has seen pressure across the asset class and our general theme is to maintain the existing allocation of BEST which has suffered due to relatively sizeable profit taking by some early adopters. In spite of that, the entire space has been cautioned last week and this weekend again due to the speculative nature of most crypto assets. The BEST reward system with increased turnover and another fairly succesfull 23M BEST burn in April drives the 'hodl' strategy. The token can only be traded marginally where the monthly reward is best turned to cash.
7 May: We would expect to expand the price range to $2200 fairly soon. Quarterly risk strongly confirms the general short term analysis with a picture above that offers huge potential upside risk weight for a strong price move north of $2,000.
The Gold rally during the latter half of the week is technically significant. All our direct critical analysis tools favor the long side and importantly supported by a positive turn of moving avg converge diverge in medium term time frame. In addition we can clearly count an Elliott ABC completed correction into early March followed by a brief rally with a near 100% abc correction into March 31. Confirmation from different relevant technical analysis angles provides comfort to the fundamental wealth management need to own physical gold. What ever happens in the next few weeks, the current gold price is a buy level again, and for those already invested an opportunity to consider adding a bit more inflation protection. First objective is a simple clean reach of horizontal resistance at $1960 and then an attempt to break the $2075 high in August 2020. 'Risk on' and Hold!
Gold/Euro live price
14 May 2021: No Change. Due to relative technical similarities across time scales we will drop the Gold/Euro comment in next editions of the blog and concentrate on the Gold/USD relationship
7 May 2021: Last weeks rally and close above €1500 represents the strongest weekly advance since the €1405 bottom on March 4. That is up 7% in 2 months and our tools confirm confirm a fresh uptrend in the making. Hold!
Gold/British Pound live price
14 May 2021: Gold finished stronger again this week and shows a similar pattern as a strong hold. We will drop this short Gold/GBP comment from next blogs unless special events require a broader update.
7 May 2021: GBP relative forex strength has pushed long term risk weight down to a much lower percentage risk level. This looks to create a base for a much stronger gold price vs the British Pound possibly coinciding with our long expected weaker Pound in the international currency space. Hodl!