From the Desk of Ian Culley @IanCulley
Readers often ask how long it will take for an open trade to reach our target.
I wish I knew.
Only the market can answer that question, as Gold did last Friday…
Six weeks!
It was only a matter of weeks — not months, not quarters — before gold futures hit our first objective:
What a face-ripper!
If this isn’t a clear indication of a new secular bull run for precious metals, what else do you need to see?
Luckily for anyone thinking about adding to positions or locking in profits, the extension level at approximately 2,450 marks a logical area for the rally to take a breather.
It doesn’t mean it will. Nevertheless, it’s still a good idea to take some profits here.
Once buyers drive gold above 2,465, we can add to existing long positions (or open new ones) with a rough target of 3,300.
Meanwhile, Platinum and Palladium are looking juicy…
These low-profile precious metals offer excellent opportunities as gold digests its gains.
I highlighted Platinum last week as it challenges a critical breakout level. And our palladium trade is trending toward our target.
One of my favorite ways to express a bullish platinum/palladium thesis is through the $4B South African mining stock, Sibanye Stillwater $SBSW:
Not to get too fundamental, but South Africa mines more platinum than any other country in the world, and it’s not even close. It’s also the second largest palladium producer, just behind Russia.
More importantly, SBSW is carving out a tradable low while printing a bullish momentum divergence on the 14-week RSI. (Notice a similar short-duration reversal pattern marked a critical inflection point in 2018).
Here’s a closer look:
I like buying SBSW on a break above 6 with an approximate target of 20. The Sibanye trade could quickly turn into a three-bagger — the type of outsized returns we can expect during a precious metal bull run.
However, price is reacting to a confluence of resistance (former highs and a multi-year downtrend line). It could take weeks — even months — before SBSW triggers a buy signal.
I highly doubt it will be trading below six bucks this time next year.
Gold is entering a rip-roaring rally. We’ve witnessed the rip.
Now, prepare for a roar to echo throughout the metals space.
Are you ready?
-Ian
Click here to watch this week’s Gold Rush Video:
Thanks for reading.
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And be sure to download this week’s Precious Metals Report below!
Allstarcharts Team
