Gold’s New Base Signals Next Big Move (Uncut) 05-01-2025

Gold’s New Base Signals Next Big Move as Rare Rally Pattern Emerges on Charts | Gary Wagner

All right, welcome back to Chart This, I’m Jerry Safran. Well, is gold once again defying expectations after days of consolidation above $3,200? We’re now seeing renewed strength as macro pressures continue to intensify here from rising geopolitical risk to a weakening U.S. dollar and a very confused bond market. And while headlines have been focused on the latest GDP and employment data, my guest today has been watching the charts.

And once again, they’re flashing signals you might be missing. Of course, our own Gary Wagner is the editor of TheGoldForecast.com. He’s been charting the gold market for decades. And I must say, man, you’ve been consistently accurate.

You’ve nailed the technical trends in this market. Last time he told us that he’d never seen a setup quite like what we’re witnessing. And the question is, what’s next? Gary, great to see you.

Great to be here. Really, really interesting times in gold. We’ve seen a all-time record high above $3,500 in June futures.

That’s history. That’s a milestone that was made just last week. So yes, really, really interesting times.

It’s been fascinating. It’s been fascinating. And let’s start kind of where we left off.

Last time you highlighted a strong parabolic trend. You were right. We saw that new price of, I think you said $3,300 to $3,500.

Well, it did touch $3,500, which you said would happen. What are the charts showing you now? Because I know you’re talking about the DXY is down about 9% this year. You have a dollar chart you want to show us? Yeah, we’ll start with the dollar very quickly and then go into gold.

Of course, there’s a 100% correlation, negative correlation between the dollar and gold. The strong dollar takes gold down and the reciprocal weak dollar supports and takes gold up. We’re looking at a chart.

It is set in terms of the time element. Each candle here represents one week. And you can see that back at the beginning of this year, my pointer is on January 13th and January 6th, the dollar index was at 109.

And over the course of just a couple of months, we’ve seen it go from 109 and touch an intraday low of 9,767, currently back to about 9,909. And that was a major support level, technically speaking. And that’s because of these two bottoms.

The first one, second day of January 24. The second bottom occurred on Monday, the 9th, September 24. So these two bottoms acted as a level that we felt should be technical support.

We did barrel through that. However, we came right back up. And right now I went from major support being broken to major support being challenged because we are right in this area.

And it’s a little too early to tell if the dollar itself will consolidate in this area and maybe pop back up because it’s had such a dynamic fall from grace or continue lower. If the dollar continues lower, 96.90 is going to be the next level of technical support. And it is based on this set of lows that came in in 2023, the 10th of July.

Wow, that’s wild. You were talking a little bit about the dollar and gold. I know we were talking about before on camera and you were saying that it added how much per ounce of gold on the DXY there? Well, if you look at this level at the end of December, Monday, the 30th, 2024 at 109.

Every move down 109 to 108 represents a 1% devaluation in the dollar index. So it has lost roughly 9 to 10% in value. And that 10% of loss goes directly into a 10% gain in gold.

The other end of the formula, so to speak, is whether or not market participants are actively buying or selling. And what we noticed last week is even with some remarkable moves in gold, they were predominantly dollar based, meaning it had less to do with the activity of market participants and more to do with the dollar trending lower. And if I go ahead and really blow that up.

So this little red line here represents this week, and of course, we’re midweek. But look at the low that the dollar hit last week. So it opens last week at 99.45, trades as low as 97.77 and is currently back up to 99.25. So even though we’ve seen a tremendous range, the differential last week between the open on Monday and the close on Friday was really restrictive, 99.36 to 99.

So a quarter of a percent, very, very small move in terms of the net change. And the way that that relates to gold, of course, is the series of rallies that we have seen over the last year, year and a half. This goes back to October 2023.

That’s where my pointer is. If my pointer is showing up on screen, the crosshairs are. But you had gold at 2000 and it ran from 2000 up to 2600 in a fairly short period of time.

In other words, a net gain of 554 dollars in 134 bars. And this, of course, is a daily chart. The rally that we had in June 2024 began at 2450, I’ll round up, and concluded at 2900.

So in terms of the net result, it gained 18 percent, but that was 455 dollars. The first rally was 554 dollars, a 27 percent move. And realize as gold gets more valued, higher in price, the dollar amount might go up, but the percentages are going to get diluted.

So when we look at a 33.29 percent gain, which is from the middle of December last year up to just recently, it’s a 33 percent gain over 86 bars. And this is so 86 trading days, but a net gain of 878 dollars. But I draw your attention to this white box here, which gives you the angle that we’re looking at.

So this is a 32 percent angle. And I’m simply measuring the low here to the high here, a 32 percent angle. Here the angle is only 19 percent and here the angle is in about 26.

So this rally is significant. It is more than significant in that we have seen gold gain more value in a shorter period of time relative to the other rallies that occurred as recently as middle of last year and the end of 2023 up to about April of last year. And that is significant.

You can see how strong that gain is and compare it to other rallies. The performance has been stellar. Percent of this 33 percent gain, as we said, about 10 percent of that gain is directly attributable to dollar weakness.

So that means that 20 percent of the 30 percent move had to do with market participants extremely active beginning in the middle of December to the all time record peak. And this is based on a closing price. Of course, it would be much higher if we looked at that intraday high that breaks above thirty five hundred, currently at thirty three hundred fifteen dollars.

Yeah. Interesting and well said. Very fascinating when you pull it out and you compare all three rallies there.

I know that it went up to thirty five hundred. You know, we’ve pulled back and just touch that briefly on the spot side. But since this pullback, I mean, it’s been pretty good.

You were watching for consolidation to form at a base around thirty two hundred. Has the base held? I mean, are we seeing another leg higher starting to form? Well, it’s been significant. The lows that we have seen have come in at thirty two eighty two.

We’ve been definitively range bound after hitting the high on Tuesday, the 22nd, we sold off pretty harsh on Wednesday, but then became very, very consolidated in terms of the open and closing price. You can see the body size is getting smaller. That’s the relationship between the open and closing price.

Again, these are daily moves in gold. And what is significant is thirty three hundred has become a level of technical support that even though traders have moved it into the area and let me show you what I mean. These tales, what we call a lower wick on a candlestick chart is a differential between the real body, which is the open and close with the rectangle drawn around it colored in red if it closes below the opening price drawn in green if it closes above the opening price.

And so you had smaller bodies, meaning the relationship between the open and closing price. But you had superlative support in that on three. Out of five trading days, traders really took gold tremendously lower to lows of around thirty to eighty.

And that includes today. That is today’s daily low thirty to seventy eight. But yet it is now within a couple of ticks of the opening bid.

It is a little bit lower. That’s why the candlestick is red. You would expect after a parabolic move up.

And this is certainly a textbook definition of parabolic. You would expect a correction that is rather strong, going at least to about thirty two hundred. But yet it has held significantly strong and technical supports at around thirty two hundred.

But we have seen real support at thirty three hundred, which means that any time the gold market gets hit with a lot of sell orders, there are enough traders that perceive these lows as value, as a market that is now oversold and they bid it back up. And that’s something you don’t see, for example, when it sells off as it did right before the beginning of the parabolic move, beginning of April. You can see it sells off.

It goes up strongly, but it only sold off for two days. And now I would call this consolidation or sideways market action in which we’re getting very little variation between where the market opens and where it closes. We might get significant wicks and the wicks predominantly the largest lengths are the lower wicks, meaning they’re hammering into the downside and bidding it back up.

And the fact that you’ve got all of these trading days in which gold is closing near its opening price is significant because it tells you that range is always going to develop a market that stays flat with the same price. There’s no activity and there’s no reason for traders to be involved with a commodity that stays at a dollar the entire trading session. So you’re going to have to have that get challenged.

They’re not really challenging it to the upside. So what we are doing is forming a base. And I would have expected a correction.

Those expectations have been proved to be incorrect up till now, because what we’re getting is strength through market consolidation, uncertainty. OK, so give me the new base. I mean, what would that mean for the new base? And again, last time you gave us those targets, 3300, 3500, that transpired.

I mean, it happened. So what’s next? Do you have an upside target or are we going to continue around here? OK, my new base is 3300, and it’s based upon really these the recent activity. I’m looking at the body size here and here, meaning Thursday.

And these are short term targets, by the way. And Wednesday, you’ve had a slow succession to lower closes, but all of them have been above 3300. So I would expect that at the point this changes from consolidation, if we get a correction, it’s one thing.

We’ll probably see gold trade to about 3200. However, because of the fundamentals in play and specifically I’m addressing the tariffs and what that’s going to do to our economy, we’ve just had some key numbers come out this week. We still have the non-farm payrolls report, which the estimates have really dwindled.

And we had GDP come out. We’ve got the PCE come out. So we’ve got important reports coming out and they’re all alluding to the same thing.

And that is that what tariffs have effectively done is contracted growth and contracted the economy, the real GDP in this country. The same goes for a lot of the European nations and globally. If the end goal with tariffs was to have an economic contraction, I would say that the administration was 100 percent successful in that endeavor.

However, I don’t believe that that was the ultimate goal, but that is the outcome right now. Right. Yeah.

I wonder, you know, because obviously we see the tariffs and this geopolitical stress that’s overriding a lot of other things. But is gold starting to decouple from real yields as well? Decoupled from what? I’m sorry. From the real yields as well.

Like if we’re talking about it in terms of these T-bills, it seems like it’s decoupled. Absolutely. You’ve got certain markets, interest rates as well as gold that are not acting in a traditional sense because the anticipation with gold was that we would get some interest rate cuts this year by the Federal Reserve.

Now, the Federal Reserve is still saying that their their target is to cut rates by about a full percent. But we are already, you know, into the year. We’ve had no rate cuts in the anticipated first rate cut of 25 basis points is not expected until June.

So we really haven’t seen the interest rate cuts that we had hoped for yet. We have seen gold barrel to these incredible all time record highs, specifically above thirty four hundred here. With this tail, meaning that gold last week opened at thirty four, thirty four, it closed at thirty three ninety.

However, it traded to an intraday high above thirty five hundred. That’s why you’ve got the wick, but no real body in this area. So you’ve got the first level of real resistance at thirty four, thirty four.

You’ve got absolute resistance just above thirty five hundred. And my target, once we move back into a dominant. Period in which we see gold prices begin to accelerate, return to rally mode, I will expect it to take out the new brass ring, so to speak, which is just above thirty five hundred.

And so thirty six hundred is is definitely achievable. We’ve had calls by certain banks for four thousand. I could see that maybe next year, but realize I am exceedingly conservative with my numbers.

So if we hit thirty seven, thirty eight hundred, I would be happy with it. It would come in much above my estimates, but it wouldn’t be out of the blue. In other words, it would be an understandable move based upon the high level of uncertainty in terms of how the tariffs will reflect in higher prices or inflation further on down the road.

And that’s key with tariffs. There’s a huge lag there between when they’re imposed and when the consumer sees it buying their goods. Yeah.

Interesting when you’re talking about the traders coming to the market and just hitting the bid as well. I mean, do you think I mean, it seems to be a little bit of a trader’s market here when we’re talking about gold. Do you expect this summer to follow the trends? Are we more, you know, where trading will happen? Or is it going to be more of a sell and may go away kind of classic scenario? I think that the range in the levels that gold will achieve are going to be highly tied to the fundamental events at play.

In other words, as long as tariffs are continuing to be imposed and there’s no resolution between the trade conflict between the largest economy in the world, the United States and I believe the largest exporter in the world, China. When you’ve got one hundred and forty five percent tacked on to the cost of goods that are exported from China, imported into the US, it dramatically changes the amount of that good that will be goods that will be sold because that’s a more than significant increase. That’s over a one and a half, a doubling plus in terms of price based upon the tariffs.

So until the tariffs are either done away with or mitigated to a smaller percentage, in other words, we are not the only ones that that use tariffs to control trade balances with other countries. All countries to some degree or most countries to some degree use tariffs as an effective means to export more than they import. That’s the whole idea behind that.

And so as long as tariffs are fully levied on these countries and specifically there’s no resolution between trade talks, which are non-existent from what I understand, what I’ve read between China and the United States, we can expect the uncertainty meter to continue to move higher and more uncertainty genuinely moves gold to higher ground. Yeah. And that’s why we’ve seen it consolidate and not correct.

I’m sorry. Go ahead. Yeah, no, no.

Well said. I mean, well said. Because last time, I mean, you mentioned last time that the pullbacks were buying opportunities.

Has anything changed with that thesis? I mean, we’re talking about the macro of something changes, but still some upside here. You could be buying the dips. I agree with you a hundred percent.

You can see from recent activity that any time traders have actively sold into the market, whether they’re either A, taking profits, if you’re long, you put a sell order in to exit the trade, or if you believe it’s going lower, you initiate a sell position. That has been predominant. But very quickly, you see that kind of get flipped where they take it to these lows that come in on the extreme end around 3270 to 3285.

And those get bid up extremely quickly. These are short term daily sessions. So the big difference here is look at how small the bodies are.

In other words, where a market opens and closes is relatively narrow compared to the huge moves, opens at three thousand on a daily chart, closes ninety six dollars higher. The next day it opens at thirty one hundred and closes near thirty two hundred and then thirty one ninety eight to thirty two fifty. You’ve got these huge leaps forward, two days of consolidation.

And then, of course, this big move from thirty two forty nine rounded to fifty to thirty three fifty six over a hundred dollar move. So the fact that we have seen gold move and gain over a hundred dollars on a daily session is not the norm. Absolutely is not the norm.

It’s not what we have typically seen. But Jeremy, these aren’t typical times. And so we’re seeing that reflected in these huge moves in gold.

Yeah. Yeah. Well said.

They’re not typical times. We’re always flying by the seat of our pants over here at Kitco News 2. Hey, Gary, thanks for this. As always, you’ve been incredibly accurate and we appreciate it.

The audience does, too. And speaking of which, I know that you said that you have an offer for the audience. I do.

You know, I have been working with Kitco going on 14, 15 years now. And I really appreciate the loyalty of our readers that look at my daily column and those that watch our videos here. And so for those that would want to consider our premium service, if they do sign up.

There is a box in their coupon code, if you type Kitco, K-I-T-C-O, it will immediately take the cost per month or per quarter or per year down by 30 percent. And that’s something we’ve only offered once in the history of working with Kitco is that kind of a discount. And it’s we appreciate the loyalty and we want to reward it.

And that’s the one way we know we can. Thanks, buddy. I appreciate it.

And as I mentioned, I’ll be in Hawaii September. We’ll see you then, Gary. Perfect.

I look forward to it. All right. Thanks so much.

And for all of you, I’m Jeremy Safran. Thank you for watching. Lots to come.

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