The financial media has taken its eyes off gold. Everyone is enamored with the new “dollar-alternatives” out there. There’s little doubt that cryptos are stealing gold’s thunder.

For now.

I actually think that this is good news for gold. Gold is staging a stealth rally and no one is paying any attention. I love it!

Look, I’m bullish on cryptos and blockchain too but I don’t believe that gold is about to play Barnes & Noble to bitcoin’s Amazon. There will be a time when the world’s attention returns to gold … and I don’t think it’s that far off.

We’ve been bullish on gold since the beginning of the year when gold triggered a Stock State Indicator (SSI) Entry Signal in April. Gold has been trading exclusively in the SSI Green Zone ever since.

The Data

Gold triggered a Stock State Indicator (SSI) Entry Signal in April
The volume-at-price chart shows that gold moved into a solid range of support and, even after a small sell-off, it remains toward the top of this range. It will take a push to get the price above this $1300 range, but we think there are a couple of tail winds that are supportive of higher prices.

Volume-at-price chart reveals gold moving into solid range of support
The number of new futures contracts for gold has been increasing all year. As open interest increases, it’s a sign that new money is coming in. Historically this condition has been a catalyst for rising gold prices.

Moreover, remaining interest has the room to run higher, to the levels of 2010 and 2016 where gold experienced good growth.

That’s a great sign for anybody looking for a good reason to get into gold now.

New Futures contracts indicating new money for gold
Our time-cycle forecast for gold has been extremely accurate for most of this year. A downturn in gold was forecast to begin earlier in November. Gold has definitely pulled back but the dip has been very shallow.

Time-cycle forecast indicating positive sign for eventual uptrend
It’s good news when an asset that’s expected to fall precipitously instead holds its own. Gold was in double jeopardy from both cyclical and cryptical forces and has weathered both storms rather nicely.

Taking the time-cycle forecast out further, it looks as if gold could continue moving higher through most of 2018, at least into the fourth quarter. This is a very bullish forecast.

Bullish forecast for gold into 2018
 

The Takeaway

For all the reasons I expressed above, gold flew under the radar in 2017. And, I don’t want you to miss out on what I feel is a very positive trend.

Investing is not about instant gratification, though we’ll take it when we can get it! A slow cautious approach with gold is paying off and I expect it to continue to do so into 2018.

Have a great weekend,

Richard_Signature

Richard Smith, PhD
CEO & Founder, TradeStops