Alex4Dev

Recessions unfold gradually (2020 being an exception). Below is what a recessionary top in the stock market looks like. They roll over gradually over many months as economic conditions slowly stagnate and start to decline. Then there is a period of many months as central banks try to stop the decline and turn the economy back up. This is the period where we get violent counter trend bear market rallies. During this period gold will climb a wall of worry. Then at the end of the recession you get a final blow off phase in metals as stocks are beginning a new bull market and gold enters the final euphoria/bubble phase. (See the second chart below). I think we are entering the final "in denial" phase where stocks continue to chug higher despite mounting evidence the economy is slowing. At some point price will stagnate and start to churn sideways for many months as the market comes to grips with the reality that the economy is in recession. Once gold finishes the sideways churn it's locked in it should resume the upward march of the wall of worry phase for several more years with a final bubble possibly in 27 or 28 as the economy starts to recover and stocks start a new bull phase. Barring an exogenous event I think the most likely scenario is for gold to remain stuck in the sideways consolidation pattern for another month, and probably partially into Sept. After that it will be game on and the next leg up begins.