Opportunity: Gold On The Move

Paper assets are struggling this year.

Both the S&P 500 and 10-year Treasurys are down around 3%.

Meanwhile, gold prices are on the move.

Shares of the SPDR Gold Trust (NYSE: GLD) are up nearly 4% in 2018. And I’m forecasting another 7%-plus gain over the next two months.

The once-loved precious metal was left for dead for the past several years. But a recent rally is bringing it back to life.

If you missed out on that move, here’s your second chance to make good gains in gold…

SPDR Gold Trust

Gold rallied from $117.50 to $129.50 between mid-December and the end of January – a roughly 10% gain in just six weeks.

That “too-far-too-fast” move was naturally followed by a pullback, forming a chart pattern called a “bull flag,” highlighted by two blue lines above.

Bull-flag patterns typically resolve with a bullish breakout. And when they do, you typically see a “second-chance” rally of equal or greater magnitude as the rally that preceded them.

In this case, GLD rallied $12 before forming the bull flag (from $117.50 to $128.50).

GLD made a bullish breakout last week, when fears of Trump’s global trade war prompted it to leap higher and clear the top of the bull flag, at $126 a share.

Projecting another $12 run, from $126, gives us a near-term target for gold of $138. That’s a potential gain of 7%-plus, which could take just a month or two to capture.

If you’re finding yourself even a little worried – about stocks, inflation, or geopolitical unrest – now’s a great time to add a gold hedge to your portfolio.

You stand to gain 7% or more as we head into summer.

 

Note: The author of this article is Adam O’Dell. This article originally appeared at Economy & Markets Daily.

Tags: , , , ,

Category: Commodities, Technical Analysis

About the Author ()

In Economy & Markets Daily, the Dent Research team, featuring editors Harry Dent and Rodney Johnson use the power of demographic trends and consumer spending patterns to accurately identify economic booms and busts well ahead of the mainstream. Harry & Rodney believe demography is destiny. It is the future that has already been written. You just need to know how to read it.

Comments are closed.