Latest / Financial Survival Network / Higher Gold Prices Ahead -- Eric Hadik #5838

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Higher Gold Prices Ahead -- Eric Hadik #5838 · Financial Survival Network

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  I always warn about trying to too closely correlate dollar and gold movement. You
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  know a lot of traders still think there's a one hundred and eighty degree in
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  verse correlation that needs to just move in tandem or inverse tandem. You're listening
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  to Carrie Letts's Financial Survival Network where you get valuable information. You just can't
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  Network now more than ever. Go to Financial Survival Network dot com and get
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  your free newsletter and gift. Financial Survival Network now more than ever. And
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  welcome. You are listening to the Financial Survival Network. I'm your host,
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  Carrie Lutts. Well, markets have definitely been volatile lately, but they've been
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  heading higher, especially the stock market. It's the dollar, etc. Where
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  are they heading? Where is gold going? Our good friend Eric Haddock is
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  with us now, and Eric, it's great to have you back on.
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  You find Eric at inside i nsidetrack dot com. And if you got a
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  question for Eric, shoot me an email k l at kerrylets dot com.
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  So, when last we spoke, Eric, you were talking about an intermediate
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  high for gold and a lot has passed since then. First, let's start
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  out talking about the dollar. Well, the dollar, I think has been
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  in a broad congestion range down near its lows, and I'm talking on a
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  three to six month basis. We saw the dollar reach some major upside price
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  targets last year. In fact, broadening out that perspective or that outlook for
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  a minute, the dollar since two thousand and eight has been in a slow,
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  steady up trend. It's that it's lowest low basis. The Dollar Index
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  in two thousand and eight saw two waves up during that time, and then
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  as we came into twenty eighteen twenty nineteen, it was ready for a final
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  fifth wave rally, which took hold. And the upside price targets that I
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  had published were right around one ten to one thirteen on the Dollar Index.
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  We hit that last year. So from a price perspective, we are probably
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  in the process of setting a major top in the Dollar index after a fourteen
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  year up trend. I think that that's going to have ramifications on a lot
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  of other markets down the road a little bit. But right now, dollar
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  came into this year, set an initial bottom and has been trying to rebound
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  from that. But one of the things I've kept telling my readers is that
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  in order to confirm anything more than just a couple month bottom, the dollar
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  needs to give a weekly close above its early January peak. That has implications
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  on an intra year trend indicator that I use, and really it should close
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  above its early March peak as well, which was set near the same level,
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  so right around one oh five. Until then, it is still languishing.
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  It still has the threat of heading back towards its lows on a short
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  term basis. A week and a half ago, I explained why a lot
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  of indicators were starting to group around one oh one fifty one O one sixty
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  in the September Dollar index futures. That's where I'm looking for it to drop
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  to in the short term, and following that that that's going to really have
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  a decisive impact on what the dollar does for the next three to six months.
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  All right, So could be so you think that's an intermediate low or
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  is that a whole shift in the trend. I think that the dollar has
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  has set a three to six month bottom, that that low could even hold
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  longer than that, and that we're in a treeting range it's probably going to
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  stretch out for some time. Again, having fulfilled five to ten year upside
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  price targets, there's a very good chance that a major peak is intact in
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  the dollar index. That doesn't remove or preclude a retest of those highs.
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  There's other indicators that I use to signal whether or not that's that's a possibility,
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  but any additional upside potential appears very limited based on those price objectives.
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  And from a timing perspective, I've been talking about twenty twenty three as being
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  a major turning point for the dollar, so I think we're in the very
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  early stages of that transition, and in a lot of trend reversals, you'll
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  see what we have seen in the dollar the last year, and that as
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  you get an initial somewhat sharp sell off, and a lot of that is
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  a reaction to the to the blowoff rally that was seen leading into a top.
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  But then a market will trace out a very lengthy, volatile trading range
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  kind of a bee wave or a week two after the initial sell off.
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  That often consumes more time than even most expect because it's going through this battle
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  between the bulls and the bears. And I think that's where we're at.
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  So I think it's going to be a trading range for some time, perhaps
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  throughout the remainder of twenty twenty three. But as that's happening, you get
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  some of your broader indicators that are more lagging indicators. They're ruling over and
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  starting to head down, and it's that sequence that really sets a market up
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  for a bigger decline, which is what I'd look for Alden's next year.
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  That a couple of months ago in my monthly newsletter Inside Track, I was
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  even discussing when I expect multi year cycle lows in the dollar looking forward,
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  But in between now and then, I think you're going to see training range,
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  have those indicators slowly roll over, and then the dollar will be ready
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  for a more significant sell off out in twenty twenty four or twenty twenty five.
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  All right, So then if we're talking about the dollar, obviously that's
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  intimately tied in with interest rates, right glad of that's gonna dictate where the
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  dollar goes. What are you seeing there? I still am very impressed by
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  the consistency and the just the accuracy of this four year cycle that you've seen
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  in bonds and in interest rates. And in July twenty twenty I explained why
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  I thought we'd see a major multi year peak in bonds low in interest rates,
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  and that was four years from the July twenty sixteen peak, which was
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  four years from the July twenty twelve peak, and this four year cycle and
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  a complete cycle progression by my definition, has unfolded since the nineteen nineties.
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  And so after seeing that major peak in bonds in July twenty twenty, which
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  again is a corresponding low in interest rates, there were two things that I
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  looked for looking forward from that. One was the more distant vantage point or
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  target point, and that was for the next phase of that four year cycle
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  to time a subsequent lower high in bonds out around the third quarter of twenty
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  twenty four, so four years from that twenty twenty peak. In between those
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  two peaks declining peaks. Like I said, you expect normally a market to
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  decline for roughly two thirds of that cycle, so two thirds of a four
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  year cycle. And there's multiple reasons for that, but a very simple kind
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  of mathematical proportional reason has to do with how markets retrace, and that if
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  you see a decline for two thirds of a cycle. It allows enough time
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  for a rebound for the final third that cycle, which from a timing perspective
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  is a fifty percent rebound and time. So in the case of bonds,
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  I was looking for bonds to sell off for roughly thirty two months, which
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  is two thirds of a forty eight month or for year cycle, and then
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  rebound for about sixteen months. There's a lot of other things. That's that's
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  the real general broad stroke expectation. Then I look at many other timing indicators
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  to show where that might be off, it might be wrong, or to
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  validate it, reinforce it and corroborate it, and give me more cred ability
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  or more confidence in the credibility of that that scenario. Bonds did adhere to
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  that, and they had to sell off for the thirty two months. That
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  time frame came in at March of this year. And I think that the
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  March lows will continue to hold in bonds, and that the next important high,
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  a subsequent low and interest rates will come into play out in third quarter
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  of twenty twenty four. Similar to what we just talking about the dollar.
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  That doesn't mean that you suddenly get a big rally in bonds or a big
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  drop in interest rates. If anything, we should see a basing process through
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  most of this year and then into first quarter, second quarter of next year,
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  the chance for rates to drop a bit or at least the perception of
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  rates, because that's what really drives bonds, and see bonds rebound into that
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  July or all Gust twenty twenty four. Then looking out, you've got the
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  potential for more interrastrate hikes, but that's that's going out a year or two
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  even farther. Right now, I think that that bonds are an abasing period,
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  interest rates are peaking. You know, we're right on the threshold of
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  the Fed announcements. The general consensus is that they will pause rate hikes today,
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  but that um that they could very well make sure there's a few hawkish
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  comments in there after the release, letting everyone know that there still is the
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  chance for a future rate hike, perhaps in late July at the next meeting.
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  But the markets respond differently to that than just topping and bottoming in lock
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  step with those interest rates removes. There's a lot more going on and that
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  fits with this basing period. Even if there is another rate hike out in
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  late July. It's that's what you see during this phase of a trend.
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  And I think as we get later into this year, you're going to see
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  you're going to continue to see inflationary numbers tail off a bit. You may
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  see some economic numbers start to show a little bit of weakness, even things
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  like real estate and housing. Uh, you may start to see that start
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  to come down a bit, all contributing to to the FED being able to
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  stop the rate height cycle and start to moderate interest rates. Okay, so
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  down the road, is this pre elections cycling type things that this word that's
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  certainly all that also fits into that that and you know, if interests are
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  a little more favorable in second quarter, third quarter of next year, um,
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  that is any certainly a series or a sequence that goes along with that
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  four year cycle in interest rates. So that wouldn't be surprising to see that
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  have an influence in there either, even though we know, you know,
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  the fit is completely a political and you know objeck and unbiased. Yeah,
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  yes, so all right, so question of gold silver, we saw all
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  time nominal high in gold. We still haven't seen much in silver. It's
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  still trading more than fifty percent below its peak. What's up with that?
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  I always warn about trying to too closely correlate dollar and golden movement. You
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  know, a lot of traders still think there's a one hundred and eighty degree
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  inverse correlation that needs to just move in tandem or inverse tandem. But a
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  lot of times you will see I mean, you go back a year ago
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  and you see the dollar in gold moving in in sync when you've got things
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  like the Ukraine invasion and other geopolitical factors. With that said, I do
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  think that my outlook for the dollar, even the outlook for interest rates,
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  is consistent with my outlook for gold over the coming years and in the short
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  term. Coming into this year, there were a couple of key time brands
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  and key cycles that I was looking for in gold. One, as you
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  mentioned from our last conversation, was I expected an immediate peak in silver in
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  late January early January and golden early February. Then after they saw some some
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  solid selloffs into late March early April, my outlook was for excuse me,
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  into the late late feb early March. I think it was My outlook was
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  for the next intermediate peak that would probably hold for a few months to take
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  place. In the very early part of May, there was a lot of
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  intermediless cycles coming into play just in the first few days of May, and
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  gold and silver rallied right into that timeframe peaked in perfect lockstep with those cycles.
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  And while peaking though that high reinforced my outlook going out farther into this
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  year. And one of the important things more significant cycles I anticipate in gold
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  and silver is in late October early November when I think we'll see a pretty
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  significant peak in gold and silver, and often you get the majority of an
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  upmove coming in the weeks prior to that. That doesn't mean that I expect
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  an uptrend from right now until a early new veter. Very often the uptrend
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  only consumes a few weeks out of that entire time frame, And in fact,
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  I actually think there is some on an intermediate basis, some lower loans
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  to be had before gold and silver to finish their correction from the early May
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  peak, and there's a lot of timing indicators that are starting to hone that
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  outlook and pinpoint when when the next three to six months low the next best
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  buying opportunity in gold and silver is lining up, and that's the time when
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  I would expect the market to start focusing on that late twenty twenty three time
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  frame, in late October early November start a multi month up trend. But
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  as I said, a lot of times you get the biggest moves leading into
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  those peaks, and so I'll also be watching how al the geopolitical landscape is
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  shaping up in the late third quarter early fourth quarter of this year, and
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  a lot of other factors to corroborate that outlook. All right, so overall
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  we're looking higher, though I think we will definitely exceed the early May highs
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  by early November. To what extent that's going to be more determined by how
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  deep the current correction goes. I've got some expectations for that, and if
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  they hold full true, then then yes, I would expect higher highs.
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  But again that's not a that's not a straight up thing, and it could
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  be a drawn out sideways market with a spike high there. That's a lot
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  of that is a kind of a dynamic fluid situation where the action over the
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  next few weeks is going to help clarify or to expect over the next few
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  months and so forth. But that's they're the key turning point time frames that
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  I'm looking at, and a couple of indicators that could be clear by late
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  June are going to really help me home that outlook for the third and fourth
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  quarter of this year. Okay, now, let's switch gears. Look at
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  oil right now. It's trading right around seven books. It looks like it's
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  week could go lower. Of what are you seeing there? Well, I
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  think has the potential for a third quarter rally. I agree with you,
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  it certainly is weak right now. But the one thing I was watching was
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  the way in which the March and May lows were set in crude at least
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  gave the potential for a three to six month bottom to take hold. But
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  there's a weekly trend indicator that I use that has to turn up if there's
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  going to be any chance of that being a three to six month bottom,
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  and and that would at the very least, I would need to see current
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  get back above seventy five in the short term and get a weekly close above
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  that in the in the front contract month. But there's more than that that
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  needs to happen in order to confirm the March and May lows as a three
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  to six month bottom. There are some intriguing cycles coming into play out in
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  the third quarter late the corner that anticipate a decisive peak in crude and the
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  energy complex. So obviously you'd need to see a rally into that time frame
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  for it to be able to be a cycle peak cycle high, and that
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  would certainly dovetail with the recent lows holding, but it doesn't by itself.
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  That doesn't eliminate the possibility of additional lows before it turns back up. So
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  right now, it too is in a drawn out congestion phase. But I
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  do think that if we can see a little more constructive action over the next
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  couple of weeks and and crude to turn a couple of one to two weeks
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  two to four week indicators positive, then I would start to get a little
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  more confidence in those recent lows holding for some time and and the onset of
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  a new one to two months, two to three month rally in the energy
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  complex. All right, sounds reasonable. What else should we be looking at?
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  Any other markets that you're following that would make sense for us to keep
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  a closer eye on. That's that's a lot of it. I'm also watching
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  just in the crypto arena that Bitcoin has some cycles that are certainly have my
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  attention coming into play in mid to late July, when ideally they would at
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  a higher high than what we saw in mid April. But if that's going
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  to be the case, Bitcoin really needs to hold at or above the twenty
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  five thousand level. But if it does that and rallies into that mid July
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  time frame, that could be a pretty significant peak in the crypto arena.
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  All right, but if it breaks twenty five thousand, all bets are off.
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  Yeah, if it breaks in from a cyclic perspective, I would still
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  expect an intermediate high in mid to late July, but what it would be
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  showing is that it's very likely to be a lower high, and it would
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  still be after that time frame when you would enter another bearish period. Okay,
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  all right, I'm agreeing with you. There anything else food or to
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  anything we should really be paying attention to. Well, I'm still pretty somewhat
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  barish on the greens, thinking that they've got another leg down in soybeans and
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  corn in particular. By the same token, there are some pretty major cycles,
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  multi year cycles showing that we could see decisive bottoms in the third quarter
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  of this year, ideally in the July August time frame. So I think
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  they've got another leg down, but it we could we could start another bull
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  market after the next low is set again, ideally in that July August time
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  frame. All right, here, got a question for you. I'm not
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  sure if you follow lumber or not, but I like it as a cater
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  of housing as a possible predictor. You got any info on that. I
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  only watch lumber very kind of passively look at kind of like you're saying there.
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  Um, I use it as a as an indicator and look at it
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  from time to time, but I really haven't it's spent much time on it
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  lately, so I wouldn't feel comfortable giving a strong opinion on it. Yeah.
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  Probably interest rates more or less tell you everything you need to know about
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  housing in the long run, anyway, although the advent of the cash buyer
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  the expansion is definitely changed things. But based on what you're saying with interest
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  rate, it's probably peaking. That's probably a net positive for housing, isn't
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  it. That's that's kind of hard to to say because it depends on the
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  chicken or the egg syndrome. Um, it could be that housing which really
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  had such a I guess you wouldn't call it a bubble. That's such a
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  parabolic move over the last couple of years. Um, it's got the head
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  winds now of high interest rates. You know, even if interest rates pull
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  back a little bit, it's they are still a significant um burden on people
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  looking at buying new houses. You've got supply that was, you know,
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  they've been struggling so much to keep up with. And you see a lot
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  of things on the on the horizon as far as supply increasing, and so
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  it could be that housing is coming down and that's what drives interest rates to
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  drop. Just again, it's it's in every case, and I talk about
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  this. I have an axiom in my trading manual that deals with correlations between
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  individual markets, between factors like this, and it's it can be very deceptive
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  to look at one thing and think there is a one hundred percent consistent correlation
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  between that and the other, because the first thing you need to know is
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  which one is leading the other. Often they move in in coincidence. Like
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  the old phrase, coincidence does not necessarily mean causality, and so so if
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  interest rates are going to drop early next year, maybe even late this year,
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  like I'm expecting, that doesn't necessarily mean that all of a sudden housing
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  goes up. That maybe that the interest rates are dropping in reaction to housing
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  coming down. So you have to look at each individually and then start to
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  kind of see if there's a higher confidence correlation at work there. Right,
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  Yeah, Well, I'm looking at the housing ETF homes h O m Z,
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  and it looks like it's triple topping for the year. We had a
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  top August of twenty two, August sixteenth, we got a higher peak in
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  February second of twenty three, and now looks like it might have peaked a
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  little bit lower June thirteenth, which was yesterday. Actually, so that's not
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  I mean, it's really an indecipherable kind of chart here looking at because it
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  had up until yesterday, it had definitely had higher lows. So but if
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  it goes to a lower high, what do we make of this? Well,
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  it'd be kind of like I was just saying that there's I think there
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  are that there consists continues to be some headwinds against housing, and and that
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  it still has some correction to do same gant that big move up that you
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  saw in twenty twenty one two. So even if it's just a matter of
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  coming back to a little bit more of an equilibrium point, uh, And
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  even if that's a rising equalibrium point like a like a rising moving average,
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  if a market gets too far away from it, it's too high above it,
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  it ultimately comes back towards it. And and even though that might might
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  be reaffirming a long term positive trend, in the meantime, while the market's
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  coming from that, we're blown peak back to the media or the equilibrium point
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  that's there's there's some pain that's felt during that time. And so that's kind
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  of what I'm expecting in in housing, that there is just some some correction
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  that still needs to flesh out from what we saw over the last couple of
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  years. All Right, Well, I think you've given us a really good
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  overview of the markets where they're heading. Just tell us, Eric, the
• 29:30
  best place to find you these days it is at our main website inside track
• 29:37
  treading dot com. That's with the extra I in the middle of inside.
• 29:41
  So it's i nsiide track treading dot Com. All right, And there's a
• 29:47
  link to it in the show notes to this interview on Financial Survival Network dot
• 29:52
  com and hey, go there. You can just click that link and get
• 29:56
  right to eric site sign up, and while you're there, to sign up
• 30:00
  for a free newsletter. Eric always a pleasure. By the way, if
• 30:03
  you got a question for Eric, which I'm sure you do, shoot me
• 30:06
  an email k L at Karrie Letz dot com. We'll get you an answer.
• 30:10
  Eric always a pleasure. Thanks for coming on, Thanks for heaving me
• 30:14
  back carry thanks for listening to Carrie Letz's Financial Survival Network, your solution to
• 30:19
  today's trying times. For the latest, go to Financial Survival Network dot com.
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  Financial Survival Network now more than ever,