Despite Pullback, Gold’s Mega-Breakout Is About To Unfold!

After what has been a chaotic start to 2018, gold’s historic mega-bullish breakout is close to unfolding!

February 21 (King World News) – Many KWN readers around the world had been wondering why gold has been in such a tight trading range with frequent takedowns, so we published this piece last Friday.  What we did not include was the (updated as of Feb. 15th) look at the daily gold chart which showed a cup and handle breakout close at hand, despite the recent volatility (see chart below).

Daily Chart “Cup & Handle” Will Propel Massive Gold Breakout!

The current inverse head & shoulders pattern (updated as of Feb. 15th) seen on the gold price chart below is incredibly bullish.  Meaning, what we have been seeing recently is the calm before the storm (see charts below).

Very Powerful Inverse Head & Should Pattern On Gold!

Here is a long-term look at the mega-bullish inverse head & shoulders pattern on gold.Notice the 2011 downtrend line has already been broken on the upside and the buy volume has been massive (see chart below).

Gold’s Mega-Bullish Inverse Head & Shoulders Pattern!

Turning to the US dollar (updated as of Feb. 15th), the chart is extremely bearish.  This has to do with the fact that the Chinese are about to launch their own oil contract priced in yuan.  This is bad news for the petrodollar and that’s why the chart is so bearish for the dollar. Notice the dollar is very close to breaking below the 2013 high (see red dotted support on chart below).

China Attacking Petrodollar…Bad News For US Dollar!

The Bottom Line
The bottom line here is that as pessimism in gold, silver, and the mining shares, crescendoed at the end of 2017 and in the second week of February, it was met with large volumes of smart money buying out of the East (for physical gold and silver), and (on the mining share side) by insiders of high-quality mining and exploration companies.  Remember, the cash flows of the high-quality mining companies are already at an all-time high (see chart below).

Free cash flows for mining companies hit all-time highs in 2016, breaking the record set in 2011, but they are on pace to smash the free cash flow record once again in 2017! And yet the HUI is roughly 72% lower than it was in 2011. That is how irrational things have become in the gold and silver sector, but it will not be a state of permanence. The purpose of the psychological warfare conducted in the paper markets is to keep people away from gold and silver and also to get them to sell.

Bottom Line: Patience
The long-term bullish trend is very powerful for the price of gold as well as the high-quality mining shares, despite the fact that games will be played in the paper gold market so that the commercials can cover short positions. For all of the gold and silver bulls, the wind is now at your back and will it will continue to be that way for many, many years to come as the prices of gold and silver make their way to new all-time highs. All that is required at this point is patience.  2018 is setting up to be a very big year for the gold and silver bulls.

The bottom line is that gold is very close to a historic upside breakout, despite volatility.  A surge above $1,400 will signal the massive upside move in the gold market is underway.  That is why Western central planners have been fighting like hell to delay this major breakout in gold.  No matter how long it takes, time is now on the side of the bulls.  As for the bears…tick-tock, tick-tock.