By Jeff Clark, Senior Analyst for Goldsilver.com and Advisory Board Member for Strategic Wealth Preservation
We don’t employ technical analysis that much, one reason being we’re buying gold and silver for what we believe will be a major shift in our markets, economy and currency. The strategy then, is just keep accumulating and preparing for that shift.
But I know someone who is very good at technical analysis. So good, in fact, he’s a multi-millionaire primarily from trading via technical analysis.
His name is Dominick Graziano, and we’ve become friends over the years. Despite our friendship, he absolutely refuses to tell me what I want to hear (gold’s going through the roof!). So I know when I get a chart from him that it will be dispassionate and solely about a trade he thinks will make him money. I also know I should probably pay attention to what he has to say, because he’s been right a whole lot more than he’s been wrong.
Once in a while he’ll send me one of his high-conviction charts on gold, whether it’s to go long or go short or do nothing. I just got one another one, and I have his permission to share it with you. It’s one worth taking a look at…
The Big Picture for Gold
Lots of technical analysis looks at short-term trends, but if you want to determine if an asset has begun a new bull market, it’s probably more instructive to look at the long-term picture.
With that in mind, I asked Dominick to give me a chart of quarterly gold prices. And what he sent is very significant from a technical standpoint.
This is a chart of quarterly gold prices from 1975 through the third quarter of this year (September 2019). Notice the similarities between now and the beginning of the last major gold bull market.
As Dominick told me, “Gold is bullish all time frames. And the quarterly chart looks very similar to the gold set up at the beginning of the century.”
The bottom half of the chart includes some of his technical indicators, and to him they all signal one thing: “The bigger picture looks good.”
He does have one caution: “In the short term gold is overbought, so it could be choppy for the next few weeks. A pull back to $1,450 would not surprise me, but that would be a great buying opportunity.”
For those of you who have wondered if you should buy now, the answer from this multi-millionaire trader is a resounding yes, especially on any dips near $1,450. The big picture view says a new bull market in gold is likely underway.
But don’t buy gold solely based on technical indicators. Buy it because there are numerous core reasons to accumulate physical metal at this point in history. Buy because your portfolio will need it. Buy because it could afford you a new lifestyle.