GOLD TO $10,000? 🚀 The "Insane" Inflation Data & Why I’m Waiting for One Final Flush

Key Concepts

• Technical Analysis (TA): A methodology used to forecast price direction by studying past market data, primarily price and volume, to establish probabilities rather than certainties.
• Parallel Channels: A charting pattern defined by two parallel trend lines (support and resistance) within which an asset price fluctuates.
• Fibonacci Retracement: A technical tool used to identify potential support and resistance levels based on mathematical ratios (e.g., 50%, 61.8%) derived from a significant price move.
• Dollar Cost Averaging (DCA): An investment strategy of dividing the total amount to be invested across periodic purchases of a target asset to reduce the impact of volatility.
• Bull/Bear Flags: Chart patterns that indicate a temporary pause in a trend before the previous move continues.
• Fiat Currency Devaluation: The concept that government-issued money loses purchasing power over time due to deficit spending, which serves as a long-term bullish thesis for physical assets like gold and silver.

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1. Gold: Long-term Bullish, Short-term Neutral/Bearish

Gareth Soloway maintains a long-term bullish outlook on gold, citing the unsustainable fiscal trajectory of the U.S. and global central banks. However, he notes that gold is currently behaving like a "risk asset" rather than a traditional safe haven.

• Technical Outlook: Gold is currently trapped in a downsloping parallel channel.
• Key Levels:
  • Resistance: A short-term "micro bull flag" may push prices toward the $5,000/oz level, but the overall trend remains downward.
  • Support: Significant support is identified at $4,100 and $3,900.
  • Buying Zone: Soloway identifies the $3,500 level as a major accumulation point, aligning with the 50% to 61.8% Fibonacci retracement of the 2022 bull move.
• Strategy: Remain neutral/bearish in the near term, expecting a "flush out" of momentum traders before initiating long-term positions.

2. Silver: Monitoring Major Breakouts

Silver is described as trading within a large bear flag.

• Key Levels:
  • Resistance: The critical level to watch is $92–$93. A breakout above this is required to challenge all-time highs.
  • Support: The $66–$64 range is a major support zone. If this fails, the price could drop to the $49–$54 range, which Soloway considers an ideal entry point for long-term holdings.
• Methodology: Soloway emphasizes that he does not go "all in" at one level due to market "piercing" (where prices temporarily dip below support due to human emotion). Instead, he uses dollar-cost averaging.

3. Copper: The Juggernaut

Copper has shown significant strength, but the chart is beginning to look "toppy."

• Technical Analysis: Copper is following an upsloping trend line. While it may see further upside, the trend line is expected to break eventually.
• Strategy: Soloway identifies $7.00 as a major resistance level where he would look to initiate short positions. He suggests using the COPX (Copper Miners ETF) as a proxy, though he warns that miners often correlate with gold prices, making them a "mixed bag."

4. US Oil: Mid-term Correction Expected

Despite correctly predicting oil as a top-performing asset for the first half of the year, Soloway expects a reversal.

• Market Drivers: Inflationary pressures (noted by a 1.4% month-over-month PPI increase) and political pressure ahead of midterms are expected to weigh on oil prices.
• Price Targets: He anticipates oil falling into the $60–$70 range by the end of the year.
• Key Levels: $94–$95 is the critical trend line break point. A move above $115 would be required to invalidate the bearish outlook and signal further upside.

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Synthesis and Conclusion

Soloway’s core philosophy is that technical analysis is a probability maker, not a crystal ball. He argues that while fundamental factors (fiat currency devaluation) support a long-term bull case for precious metals, technical levels provide the necessary framework for entry and exit. His methodology relies on identifying "major" vs. "minor" levels and acknowledging that markets are driven by human emotion, which necessitates a disciplined, incremental approach to building positions rather than attempting to time the exact bottom.