COMMODITIES UNDERVALUED VERSUS STOCKS
THE CRB vs. DOW: I believe commodities reached a major inflection point in 2020 triggered by the coronavirus. We saw similar periods of commodity outperformance during the 1970s and 2000s. I believe precious metals and commodities are starting another bull market that could last well into 2030.
GOLD LONG-TERM: From a technical set up, I believe we are in a similar position to 2004. Though gold could drop a little further near-term, I think prices are going much higher over the next 10-years.
Gold closed below the $1850 support level and confirmed the bearish scenario outlined in last week’s report. Ultimately, I believe prices could stay under pressure for another month. Prices are expected to reach $1750 and perhaps as low as $1670 in December. Longer-term, buying gold at or below the rising 200-day MA is historically a favorable opportunity.
Silver has held up better than gold and remains above its September low. Ultimately, I believe prices will test the 200-day MA (currently $20.62) with a spike to $19.00 or lower possible in December. This is shaping up to be an excellent long-term buying opportunity, in my opinion.
I find the price action in platinum intriguing. Prices are rising as gold and silver are breaking decisively lower. There is still a chance prices will reach our target in December, but if prices continue to defy the odds and rally above $1050, then I think they will go much higher. To support a near-term breakdown, prices need to close below $900.
With money rushing back into risk markets, energy stocks have exploded higher. The potential for a double bottom lessens with each day prices remain above the 200-day MA. I became bullish on energy in October and labeled the sector a generational buying opportunity. With major inflationary forces as a tailwind, I think they could go much higher. I’m considering adding an energy portfolio to our premium services. I’m patiently waiting for a pullback to buy more.
In summary, I believe precious metals have reached long-term buying opportunities. I believe the commodity bull market is just getting started and could last for ten or more years. To reduce stress and maximize profits, I designed the gold cycle indicator and began the Gold Predict educational portfolio.
For long-term success, I believe one should find a sector that is just starting a new bull market…take your seat on that train and stay on as long as possible.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. He posts daily updates to Premium Members. For more information, please visit here.
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This article was originally posted on FX Empire