Hoard On For Dear Life - HODL Gold With Diamond Hands
A couple common pump rally cries amongst the promoters of crypto currencies is that they are Holding On for Dear life (HODL) with Diamond Hands.
Bitcoin got its bump from the initiation of ETFs already, and since then it peaked at around $70k then rolled over. It is heading first below $50k and then $40k. I also make the argument that the Bitcoin bulls will do much better HODL with gold than Bitcoin.
I started making similar comments a few couple months ago with the report headline, The Battle Lines Are Drawn Between Gold And Bitcoin. Gold is up a couple hundred bucks per ounce since then and Bitcoin is down. So far, so good.
Bitcoin looks to be in a serious correction, the last top was around $70k and the dip after that went down to $50k very quickly. It had a Dead Cat Bounce by gaining back around half the loss, but is forming a lower high and next I see a lower low that takes it under $50k. This is an interesting number because it is very close to the average price buyers over the past few years own it at.
For those that bought around $70k this year, they have to be sweating and the market is about to test their Diamond Hands. Below $50k and the vast majority of buyers over the past few years will start getting Shaky Hands and looking at the sell button.
Another interesting number is $40k which is around the average cost of mining Bitcon (oops Freudian Slip on purpose) sorry, not sorry. It breaks below that and structural issues show up that brings panic selling.
Gold looks like a much better HODL trade to hold with Diamond Hands. The world is returning to the Gold Standard. Today it had its highest ever close on the futures market for a day, week, and all-time.
The second quarter of 2024 was spectacular for several gold miners as the average price of gold during a quarter, ever. The third quarter is on trend to surpass the second quarter. This has brought bullish action to the gold stocks that is moving its way down the gold stock food chain from top to bottom.
The first two quarters of 2024 have been great for gold and the second half is shaping up to be even better as the Fed starts lowering rates.
This will put pressure on the US dollar which is already in trouble on the DXY index since the top after mid-April, 2024. Since then, it has made a series of lower highs and lower lows. It is getting ready for a big drop when the Fed pulls the trigger to cut rates.
Prior to gold breaking out above $2100 earlier this year, I had predicted it would in my reports. I also said that gold would make a series of record highs throughout the remainder of 2024. Everything is on schedule.
I’ve also recently been predicting in my reports that we will see $20k gold within 10 years. One of the milestones on that path is to see it get over $3k by the end of 2024 or at the latest early 2025. With gold setting a series of higher highs and higher lows, and the Fed about to cut rates, it looks like $3k in 2024 is in play.
While Bitcoin and the USD are making a series of lower highs and lower lows, with gold doing the opposite, I have serious confidence that gold is shining as the most sound money and headed much higher.
The Bitcoin bulls and USD bulls have the golden welcome mat in front of them. It certainly won’t take a lot of them joining the gold bull market party to drive gold much higher. And by extension gold stocks. It will help them protect their falling purchasing power.
Horse meet water.
All the best,
Allan Barry Laboucan
Disclosure
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