An Introduction
“…While I remain confident that gold is on track for a substantial long-term rally – potentially exceeding $8,000 by the end of the decade – but current sentiment feels excessively bullish and, In my view, a pullback below $3,000 isn’t just possible, it’s highly likely ” says AG Thorson in an article which I have edited [ ] and abridged (…) for the sake of clarity and brevity to provide a fast and easy read.
Gold Has Topped
Thorson goes on to say that his proprietary Gold Cycle Indicator has hit its maximum topping which happens just once every few years and is usually followed by an average 20% decline over the following 3 to 6 months, once the final peak is in.
“On Thursday, April 17th, gold approached the upper boundary of its 10-week EMA envelope ($3,359), signaling a potential end to the recent blowoff phase. Notably, a similar pattern played out in 2022, when gold peaked roughly two months after the stock market began to decline—also after touching this upper boundary. A comparable peak occurred in 2020 under the same conditions.”
The previous two cycle highs occurred roughly 115 trading days apart, drawing particular attention to April 21st; the ideal timing window for a cycle high is between April 16th and April 23rd. Consequently, prices could peak any day.”
In Closing
Thorson believes gold is nearing a major peak and is likely headed for a 20% correction that could unfold over the next 3 to 6 months and, if silver surprises to the upside and breaks above $35.00 in the coming days, the rallies in gold and mining stocks could extend beyond April. He also sees the stock market entering the early stages of a cyclical bear market—one that could push prices well below the April lows and, eventually, weigh on both metals and miners.
