Was September 2022 the 8 Year Cycle Low for Gold?

[sixgun]

NEW BULL MARKET FOR PRECIOUS METALS?

Many signs are pointing to September 2022 as a major turning point for precious metals as evidence is mounting that gold made a major low that month (8 year cycle low). If this were the case that means we’re in month 3 of a new long term bull market (usually around 8 years). That means the advancing phase should last for years. For context, the 8 year cycle that likely just concluded in September 2022 rallied for 54 months from January 2016 to August 2022.

You can see a chart marking that last 8 year cycle low and the rally that ensued. If this is a new long term cycle that would mean years of upside ahead

Monthly chart of Gold showing confirmed previous 8 year cycle low in Dec 2015 and the most recent potential 8 year cycle low in Sept 2022

We can’t be sure we will get a rally just as long this time but we can see from the chart the shortest 8 year rally we have had was 34 months. Again, we may be just on month 3 so let that sink in!

There are the 4 specific data points that suggest September 2022 was the 8 year cycle low for Gold. They are listed below along with a corresponding chart for each. 

The wonderful thing is we will be able to see if any of thee data points starts to move in the wrong direction telling us the thesis is wrong. These will serve as our guideposts to be sure the 8 year cycle low is behind us. We will continue to monitor these data points and update if there are significant changes.

Our 4 Major Pieces of Evidence

1. Bullish monthly swing low for Gold (and silver and GDX too!).

 

Monthly chart of Gold showing the monthly swing lows that formed the foundations of a major cycle low. For the previous cycle bottom that happened by crossing above $1088.90. For our current potential low in September 2022 the monthly swing low is active above $1735.10

For more background on how to identify a swing low which is what marks a market bottom you can refer to this video: https://youtu.be/pPZw_Kg3ElQ

2) Bearish monthly swing high for #DXY

Quarterly chart of US Dollar (DXY) showing past significant swing highs and the subsequent declines that ensued. If we close December 2022 below 104.636 that would create a quarterly swing high and indicate we have started a downtrend on the quarterly chart

For more background on how to identify a swing high which is what marks a market top you can refer to this video: https://youtu.be/DHsVB7KVPjw

3) Bullish monthly swing low for $GDX to $GLD ratio. Gold miners outperform Gold in precious metals bull markets so seeing this ration in a long term downtrend is very bullish.

Quarterly chart of gold miners (GDX) vs. Gold showing a bullish quarterly swing low as of September 2022. If we close December 2022 above .17 that would create a quarterly swing low and indicate we have started an uptrend on the quarterly chart

4) Bearish monthly swing high for Gold to Silver ratio. Silver outperforms Gold in precious metals bull markets so seeing this ratio in a long term downtrend is very bullish.

Quarterly chart of the Gold to Silver ratio showing a bearish quarterly swing low as of September 2022. If we close December 2022 below 84.75 that would create a quarterly swing high and indicate we have started a downtrend on the quarterly chart

As we close out 2022 and begin 2023 we will have a more evidence either for or against the cycle low being confirmed for September. We can rely on evidence instead if emotion. For a detailed review of this evidence as well as some pointers on how to “sell the top” (as close to it as possible) of the next parabolic run for silver you can check out this detailed video

 

Edited December 29, 2022 by sixgun