- America: The Worst Place on Earth?
- The U.S. dollar is hanging off another cliff.
- Gold is about to hit another new all-time high.
It’s a great time to own Gold.
The United States of America has the worst stock market in the world. The “A.I. Revolution” is cancelled.
Trump is literally killing the economy. “Free trade” is in the dustbin of history.
The U.S. Dollar has collapsed.
It makes perfect sense.
And Gold has a lot of fuel and a lot of room to run from here.
This Chart Will Warm Your Heart
Our director of research put together a really good-looking four-panel Gold chart.
The upper-left panel is Gold at all-time highs in absolute terms. We use the SPDR Gold Shares (GLD) ETF to represent the metal.
In the lower-left panel you see GLD making new four-year highs relative to the S&P 500 Index, represented by the SPDR S&P 500 ETF Trust (SPY).
It’s all relative on the right side. Up top that’s Gold at all-time highs vs Bonds, or the iShares 20+ Year Treasury Bond ETF (TLT).
On the bottom is Gold vs Commodities, or the Invesco DB Commodity Index Tracking Fund (DBC).
New absolute and relative highs are clear signals of strength.
We call lines that go from the lower left to the upper right “uptrends.”
Gold is at fresh all-time highs on an absolute basis.
It’s showing remarkable strength with four-year highs relative to U.S. stocks… and bonds… and commodities…
New highs are bullish. They’re the most bullish thing there is.
The potential for Gold at these levels is huge.
The Signal and the Fuel
You guys remember all the way back in October when the U.S. economy was “the envy of the world,” right?
This is The Economist in March:
It’s not that The Economist is consistently “wrong.” It’s consistently late.
And that’s good information for you and me and our weight-of-the-evidence approach.
Sentiment is sour. Trump and tariffs are terrible. “Uncertainty” is bad. But the Dollar is not going to zero.
It’s not going back to all-time highs again soon, either.
The U.S. Dollar Index is a broad gauge of the strength of the American economy relative to the rest of the world.
It’s been pricing it all in for weeks:
The first “Oops!” is where it failed to break out at the end of its year-end rally.
That second “Oops!” is the key level I’m watching right now.
If we zoom out to a longer time frame you can see where the downside for the Dollar is from here:
The recent Dollar breakdown is providing a lot of short-term fuel for Gold’s rally. It’s also happening within a longer-term trend.
Right now, I’m curious about how this 61.8% retracement holds.
Our bigger picture includes a commodity supercycle that we intend to ride for quarters, years, and decades.
We see a lot happening in the next three to six months.
I’ll have a lot more on Gold’s historic breakout and the Dollar’s historic breakdown… and how you can profit from both.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs