This week, we’ll shut out our chart evaluation for 2024 with a take a look at a long run combo chart with the Dow/Gold ratio quarterly line above and gold under.
Instantly, we will see that the ratio is presently buying and selling close to an traditionally vital stage close to the 1929 excessive. We will see that value has fallen by way of that stage 3 instances in historical past, and when it has, the drop has been dramatic with an 87% decline after 1929, a 92% decline from 1972-1980 and a 59% decline from 2007-2011. This led to distinctive rises within the gold value of 75% (because of authorities revaluation),19X and a pair of.5X respectively.
Not solely is the ratio as soon as once more buying and selling under its 1929 stage, it’s also breaking under the apex of an especially giant wedge that started forming at gold’s secular bear backside in 2001. Falling under such a big technical sample, mixed with shedding this traditionally essential stage might effectively imply the ratio is ready for its 4th waterfall decline within the final 100 years. In that case, prescedent says that $4,500 gold is a lock, and a 10X of that stage shouldn’t be out of the query!
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