Gundlach: Gold On The Verge Of "Thousand Dollar" Breakout


Two charts paint a succinct and elegant picture of the gold/USD trade at the moment.

The USD has just begun its third successive fall after another lower recovery high in a hugely strong multi-decade chart pattern, fueled by international economic feuds and an administration who favors weak-dollar policy to begin with.

Jeff Gundlach, who currently manages over $100B at DoubleLine Capital, said

“Gold is negatively correlated with the dollar. We see that gold broke above its downtrend line. But now we see a massive base building in gold. Massive. It’s a four-year, five-year base in gold. If we break above this resistance line one can expect gold to go up by, like, a thousand dollars.

Will it happen? Well it’s not happening right now but it’s a very interesting juncture. It’s a great time to be buying gold straddles. Because one way or the other this baby’s got to break in a big way.”

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ORIGINAL SOURCE: On My Radar: Mauldin Economics 2018 SIC (Part 3) – Jeffrey Gundlach, “Inflation is Inflationary” by Steve Blumenthal at CMG Wealth on 3/29/18


RAT005 Laowei Gweilo Tue, 04/10/2018 - 20:14 Permalink

The chart is printed to show resistance being tested, so that it can be printed to show resistance holds, reaffirming a top and buying what ever time it does to further extend Fiat life.  Looks like it will be quite awhile yet before the next BTFD.  Silver looks targeted for $15.  You just never know when you have seen the last BTFD or if there is another one coming.....

In reply to by Laowei Gweilo

Theosebes Goodfellow kahplunk Tue, 04/10/2018 - 21:22 Permalink

~Well, maybe the old saying is correct, "five hundredth times a charm!"~

And a stopped clock is right twice a day. Sooner or later a boy crying "Wolf" is actually seeing a wolf.

There is though certain situations one might wish to be proactive about. If you had a self-directed IRA, and your retirement money was in gold bullion held in a depository, now might be a good time to take a distribution, (presuming you were of age to do so).

By taking the distribution now, in gold, silver, etc., then you are on the hook for the taxes of the PMs at current prices. Should Gunlach be right, you will avoid the tax bite at the much higher rate.

In reply to by kahplunk

fx Theosebes Goodfellow Wed, 04/11/2018 - 04:38 Permalink

Given how terribly weak the dollar has been over the past 12 months, gold should have been way, way higher already! The fact that gold merely held its ground amid an epic dollar decline is a sign of weakness, not of strength for the yellow metal.

Imagine what would happen if we were to see a counter-trend rallye of the $ over the next few months.

A straddle may work but for those who want to play an upside break-out I would really wait for it to happen rather than anticipate it. If gold really is in for a $800-$1000 rallye, then I can easily forego the first - and hardest to earn - 100 bucks.

In reply to by Theosebes Goodfellow

highly debtful Buckaroo Banzai Wed, 04/11/2018 - 02:54 Permalink

Actually, it should be something like "todamoon", at least that's how I read it several times in the past.

But IMO the price will rise sooner or later. Too many spinning plates in the air. But in the end the exact price in dollars or euros or whatever currency will be of no importance.

What will count is what you can really buy with it. 

Some food would be nice.

In reply to by Buckaroo Banzai

Food Loaf Junkie SoilMyselfRotten Wed, 04/11/2018 - 06:13 Permalink

That will be the trigger.  If they settle in fiat for a gold contract you will see a large divergence between physical and paper gold prices.  That should start massive purchasing of physical.  The supply of physical in the U.S. is a thin veneer and would soon be stripped away.  Most of the stray gold melted away ( pun intended) in the last big price rise (i.e. $1900+ per oz.  I simply don't believe there is that much gold left in the closets and jewelry boxes to yet come to light.

In reply to by SoilMyselfRotten

Bam_Man Tue, 04/10/2018 - 20:05 Permalink

"Gold is negatively correlated to the Dollar."

What a genius!

Isn't ANYTHING quoted in dollars negatively correlated to the Dollar?

But I hope for once this pompous jackass is right.

Added another 1oz Gold Eagle to my stack today.

weliveinamatrix Tue, 04/10/2018 - 20:12 Permalink

I thought Alice was going to the moon....never happened...grrrrr

altho, taken a look at the last year of dollar value?  From 102 to almost 88.  What the hell does that mean tho? devaluation of dollar? Seriously, so what if the dollar hits 50?  What will it change?  Some mention the zimbawee situation, but zimbeawee did not have NATO.  hmmmm.  Doesnt matter what happens, they will just bomb us, kill us with GMO, chemtrails, vaccines and television...or even worse, 100 hours of being alone in a room with hillary, pelosi and john mccain having a threesome....oh god the terror!!!!

Scrot Tue, 04/10/2018 - 20:29 Permalink

Wow. So the last thing would do in that situation is actually SELL any of their Gold or Silver, right? Strange how all the people who tell us gold is on the verge of a breakout make all their money BY SELLING GOLD!


Please.... we need commentary on the bullion market by analysts who don't sell bullion.

Francis Marx Tue, 04/10/2018 - 20:37 Permalink

 Gold melts in a nuclear war. Matter of fact it vaporizes if your near enough to the blast zone.

 Sooner or later it will pop. I mean if they keep cutting the world off from using dollars, I would guess gold would rocket.