Rare occasion: my gold prediction today is what the mass media also sees
If you haven't noticed by now, I don't get influenced by what's HOT in the media.
Last week I spoke about my prediction, where I believe the rand will weaken to R16.80. If you missed it, you can look for the article "I was wrong".
If you search MoneyWeb.co.za, the Star and Business Day live ,you'll see the media is bombarding readers on why the rand is expected to weaken.
I like to write predictions on financial markets when they're NOT in the media. And the reason is… I believe that once the news is out for the world to see, it's already too late.
However, today is a rare occasion. Yesterday, I was going through my charts and one commodity got my attention.
Today, I see there are news stories all around on gold's upside. And guess what? My charts agree. This is a rare occasion where I actually agree with the media.
Why the media sees upside for gold
According to VTB Capital JSC, they expect gold to jump to $1,400 by the end of the year.
This is because of the tension that’s brewing between North Korea and the US with threats of strikes to neighbouring countries...
And this potential for war is causing a surge in the demand for gold as a safe haven for investors.
And to make matters worse, global politics is resulting in China and India buying gold as well.
In fact, China’s demand for gold has risen by more than half in the first six months of the year and consumption climbing to almost 10% (China Gold Association).
So these hedging opportunities are giving enough lee-way for the gold price to shoot up.
And funny enough, the charts agree with the world sentiment.
Why I see a 23% rise in gold in the next three months
Looking at the above weekly gold chart, you’ll notice that gold’s been moving in a sideways fashion for the last four years.
However, you’ll observe that gold has been making higher lows for the last year. This tells you that demand is creeping up.
The first low was at $1,042. Second low was at $1,122 and the third low was at $1,210. This should tell you that momentum is set for gold to break above the $1,365 resistance.
Once it breaks out, it’ll create enough momentum to rocket all the way to $1,684 which is a 23% rise.
Here’s the calculation:
Target =(High – Low) + High
=($1,363 - $1,042) + $1,363
What can you do about this rise in gold?
You can either get into the Spot FX Gold and hold. Or you can wait for my signal
to buy and profit from gold specific companies that are set to rocket with gold’s rise in price.
Coming up: If if you'd like to make these kind of bold predictions then you'll need this strategy in your trading life.