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May 15th, 2022: The Midas Touch Gold Model™ Update

Gold — The big picture

Gold in US-Dollars, monthly chart as of May 14th, 2022. Source: Tradingview

The Midas Touch Gold Model™ Update

The Midas Touch Gold Model™ as of May 14th, 2022. Source: Midas Touch Consulting

Overall, the following conclusions can currently be derived from the Midas Touch Gold Model™:

  • On the monthly chart for gold in USD, a buy signal is still active. This would currently only be negated at prices below USD 1,722. On the upside, however, prices above USD 2,041 are currently needed to classify the weekly chart as bullish again. Until then, USD 230 are currently missing. Hence, we have to assume that gold will probably need a lot of time again until a new sustainable bullish setup will be established on all three decisive time frames (monthly, weekly and daily chart).
  • As well, the strongly increased gold/silver-ratio makes clear that one will have to exercise patience.It may still take a long time before silver heralds the next exaggeration phase on the upside with a clear outperformance against gold.
  • The weakness of gold against other commodities is also striking. Since a significantly weaker oil price is not foreseeable for the time being in view of the difficult geopolitical situation and many other commodities will increasingly suffer from supply difficulties, a new buy signal for gold against commodities will probably drag on for a longer time.
  • Although bitcoin has mercilessly outperformed gold in recent years, the bitcoin/gold-ratio currently favors gold. Actually, it now takes just under 16 ounces of gold to buy one Bitcoin. It would be no surprise if within the next 12 months, bitcoin could temporarily be purchased for only 10 ounces or even less.
  • The US Dollar index gained a good 17.3% over the past 12 months and hence has been putting quite some pressure on gold, especially in recent weeks. Thanks to the steep rally, the US Dollar Index is currently trading at its highest level in 21.5 years. However, the strongly overbought and overheated situation could soon force a significant pullback, which would allow at least a temporary recovery in the gold price. Should the US Dollar index fall below 103.40, this component within the Midas Touch Gold Model™ changes to bullish for gold.

Gold — Outlook until the summer

Gold in US-Dollars, daily chart as of May 14th, 2022. Source: Tradingview

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