Thus far in 2025, ’tis been the year of the Gold bid. Folks who are clueless on Gold are abashedly asking about it. “How much is it?” “How do I buy it?” “How much is in Fort Knox?” “How do I store it?” “How much is it taxed?” “How do I get it outta the UK?”
Indeed, we too query: has our having penned 800 Gold Updates finally made the world Gold crazy? That century-to-date — although the S&P 500 is + 329% (from 1320 to 5668) — that Gold’s growth is triple that at +1,005% (from 274 to 3028)? It is clear that this year the Golden lightbulb has suddenly gone aglow and everybody’s excited to give Gold a bid, even wee London:
Naturally, we’re also excited. Based on the linear regression pace at which Gold is rising so far in 2025, it would reach our year’s forecast high — Golden Goal Three of 3262 — on 07 May: that’s a mere 32 trading days from now, with then nearly eight months left in the year’s balance!
“I dunno mmb, but if it happens that fast, then what?”
Two generalizations there, Squire. “IF” the low for this year is already in place (2625 on 06 January), Gold has a shot at 3400 (or purely in the “expected yearly trading range” equation, 3380), fundamentally supported by Federal Reserve interest rate cuts in concert with a slowing StateSide economy. Contrarily, stagflation sets in and the Fed is stuck, perhaps even having to raise its FundsRate to slow rising costs, the Dollar then getting the bid away from Gold, which in turn travels toward such downside range in revisiting the 2700s, 2600s, 2500s. In the meantime, this Friday (28 March) bring February’s “Fed-favoured” inflation gauge of Personal Consumption Expenditures.
For as can be the case with markets — excitement breeds near-term excessiveness. Through this year’s 55 trading days-to-date, Gold (as is its current case) has been “textbook overbought” for 45 of them. We refer to it as “textbook” as ’tis visible to the trading public at large should they care to access such available mix of standardly-used technical studies, our preferred cocktail consisting of John Bollinger’s Bands, Relative Strength and Stochastics.
Better still (albeit far less publicly-viewed) is the website’s BEGOS Markets Value for Gold, which just completed a 52nd consecutive trading day above its smooth valuation line, price next shown as +139 points “high”:
Hardly is 52 days above that line a record (the most in the past 25 years being 75 days); however upon reaching 52 days, price then on average within the ensuing 63 trading days (which for you WestPalmBeachers down there is one trading quarter) has fallen -7%. Thus per Gold having settled the week yesterday (Friday) at 3028 — posting en route a fresh All-Time High at 3065 — a slide within such -7% vacuum would be some -200 points from here, i.e. relatively in line with our having suggested that the road to Golden Goal Three of 3262 may well first travel through the 2700s-2600s, even to as low as 2507 … just in case you’re scoring at home. For unlike the NVIDIA’s (NASDAQ:NVDA) or Palantir’s (NASDAQ:PLTR) or GameStop’s (NYSE:GME) or even Bitcoins of the world, Gold is not (barring a U.S. Treasury default) going to go straight up: ’tis too globally liquid for the offers to just “vanish”.
The point is: be thee not discouraged should price pullback a few hundred points, for the ultimate Gold target as ever remains the opening Scoreboard’s Dollar debasement value which at present is 3803. Hence as depicted in the above graphic: “Near-term, Gold is too high of course broadly, Gold is too low!”
Either way, Gold’s year-over-year trend remains nothing short (pun!) of amazing! To wit, Gold’s weekly bars from a year ago-to-date astride the ever-rising parabolic Long trend per the rightmost blue dots:
And therein note the Gold/Silver ratio is back above 90x, the current 90.3x level being the second-highest weekly close so far this year. Priced to that ratio’s century-to-date average of 68.8x, Silver — rather than being 33.53 today — would instead be +31% higher at 44.00 “Got Silver?” (a rhetorical question for our resourceful readers).
From having recently been less resourceful to flatlining this past week is the Economic Barometer. Oh, there were incoming metrics aplenty: 16 of ’em of which seven bettered their like reading of the prior period and nine were worse. The week’s best winner was February’s Existing Home Sales which bettered both consensus and January’s number, such prior month also revised higher. But the stinkers were March’s National Association of Home Builders Index taking quite a tumble (from 42 to 39), as did the month’s New York State Empire Index (from +5.7 to -20.0).
‘Course, the week’s non-event highlight was the Federal Open Markets Committee’s “sitting on its hands” Policy Statement.
But in conspicuous contrast to the sudden stumble by the Econ Baro, did you read the FOMC’s opening sentence of its Statement? ‘Tis below embedded:
Not to be overly critical of The Fed, but might its referred “recent indicators” be from last September during which time the Baro — as you can well see — was firmly rising? After all, you know the long-running saying that “The Fed is behind the curve.” Perhaps esteemed voting member (and ChiFedPrez) Austan “The Gools” Goolsbee could shed some light on such recent “solid pace”. Anyway, we’ll instead stick with the actual math.
Turning to the math that makes our “Baby Blues”, they are ever-smoothly in synch with Gold’s moves, either up or down. Such measure of regression trend consistency as below shown on the left is fairly well-paired with price across the past three months, albeit Gold has dropped for two successive days even as the dominant trend is up.
And on the right in Gold’s 10-day market Profile we see 3043 as the highest-volume handle traded these past two weeks, its role at present that of overhead resistance with notable near-term volume support at 2996:
As for poor ol’ Sister Silver, she has declined for three straight sessions, her like graphic from three months ago-to-date below left and Market Profile below right. Therein, her dominant volume resistor is 34.35:
Gold’s Year of the Bid indeed! We’re a bit surprised to see the yellow metal moving so swiftly toward Golden Goal Three of 3262. Through the year’s first 12 weeks, only one has been down: such stints of 11 up weeks in 12 have only occurred (as a mutually-exclusive basis) on five other occasions so far this century. The average price fallout following those five instances within the ensuing three months? -9%, which again “suggests” similar downside to the aforeshown currently streaking Market Value’s “price over valuation differential” that has historically then led to an average -7% drop. But as we on occasion caution: “Average is not Reality” especially given Gold’s strong bid this year. Still as stated, we shan’t be surprised to see Gold revisit the 2700s, etc.
And in Gold’s year of the bid if such pullback must be, better it indeed be prior to our 3262 Golden Goal Three!
Cheers!