Gold's Violent Reversal: How Far Does Rally Go? | Gary Wagner

We're certainly not out of the water yet, but this is a good start to moving back into Thank you. a bullish market sentiment. These tops up here, mark my word, they will get hit again. What do you think will happen to gold in 2027? Gary Wagner, editor of thegoldforecast.com is back. Its low was November 1st, down to almost $3,800. Now, gold's been soaring higher. Now it's back up to $4,800, or $4,100, rather, $4,100 and change. Gary's going to give us his outlook and whether or not this rally means the beginning of the end of the bear market gold experience pretty much all year since the end of January. Importantly, anything changed fundamentally with gold after the midterm elections? We'll find out. Gary, welcome back. Good to see you. Thanks. Thanks for having me. And it's such an interesting time. You and I, we've watched gold for decades. We've seen tremendous moves. But I haven't seen this kind of almost whipsaw action that's not only whipsaw, it's whipsaw with extended rallies and extended corrections. Now, it's nothing like we saw in 2011, where it meandered between 1900 and 2000. And then when And when it broke below $2,000. 1900 and flirted around 1800. No one knew where it would go. It would take five years, a multi-year correction, and it didn't stop to 1,000. I am personally under the belief that our technical studies, I believe, confirms that that we did experience a deep correction. About a third of the price of gold per ounce came off the top. But that's nothing like we saw when the price of gold was halved. Back in 2011 to 13 through 2015. Well, is there anything with the Democrats now controlling both chambers of Congress that may shift the macro fundamentals in favor for gold? So many paradigms have kind of turned on their head. It's a little bit more difficult to explain or to be really confident. But in years ago, higher inflation was a bullish. tailwind that would move gold higher. However, in this recent period, what we saw was higher inflation expectations, took gold lower, and the reason being because they took in what the Fed will do, which is to raise rates, and that's poison for gold prices. So we're getting a much more complex read on the relationships with all the market and the fact that the Democrats are are in control. I've heard it on both sides. I've heard that they'll spend more money because they tend to have more programs. At the same time, they will not enable Donald Trump and his policies to pass so easily. So that's going to be a series of give and takes. And no one is really certain how this will work out because you've got, at least for the Congress, they're a lame duck. And in January, I believe, a lame duck president. So it's an interesting time. My sense is that inflation really hasn't budged in years. It's still sitting. Not like during the Clinton era, but it's still sitting well above three. It's gone down below it, but we're not hitting any of the crazy numbers we saw. It's about passing legislation to help Americans and if that will cause more inflation. And it's all about inflation expectations that is driving this market vis-a-vis what does the Federal Reserve do with that information in terms of their monetary Okay, so in February, That's the time point when the initiation of the war transpires. Here's February 28th. It's trading around here, but in... The 29th day of January, that's when we hit the record high. We'd have an exaggerated low and then a series of lower lows all the way down up until about July. In July, we consolidated for a little bit, but we had one of the strongest rallies of the year, and I'm going to round up and round down, going from about $4,000 an ounce to $47.50. In other words, a 750. This move took weeks, whether it's five weeks or eight weeks, and then just as quickly, actually a little bit slower, it would fall. And what was very peculiar is many of us expected that gold could find. Tentative support right around 4000. It's a key level. It does match up with a couple other things. And that's basically this top here. And this is what I call the original kickoff point for the rally itself. So it does match up with that. We're not seeing the kinds of precise correlations that we would typically see. Although the new chairman has claimed for transparency, He doesn't say as much in a press conference. It seems like he gives only what he believes he has to give. So what we can say is what we're seeing. That's a tremendous fall from grace in September, finding support at 4,000, and then from there moving considerably higher. Excuse me. Yeah, finding support at 38, and now it's at 4,155. But what about the 38 level marks a major support? I thought it was 4,000. $3,800, you said, was a major support level. That's marking your chart, right? But I mean, previously, I've spoken to you about potentially what happens to gold if it goes below $4,000, and it did exactly that. So I'm wondering if you looked at that chart right after gold hit $4,000 and thought to yourself, gee, that's a potential bottoming pattern, or we're looking at a major breakout to even further levels below. Right when it hit this lowest point, which was Friday the 30th, and the next day was green, I said, it's kind of like in Dumber Dumber where you're saying, so you're saying I got a chance, that sarcastic chance. I needed more proof. The next day didn't give me a hard resolve. But then on Wednesday, this is the $132 move, and it was my minor level of support that I added after the move was made. This R1 was put in after the move was made, and my new R2, resistance 2, I consider R1 major, and this being minor, resistance 2. I can tell you where it probably would have gone had it not held this area, but when you do that, look where you've got to go back to, just this area here in September 2025, quite some time ago. so I believe that there was a high probability that it could break lower, but I was hoping that it would hold this area. We're certainly not out of the water yet, but this is a good start to moving back into a bullish market sentiment. In other words, there's a partial awareness and absorption that the Fed's got almost an 80% probability of raising rates at the next meeting in December. That's been all over the board, but that's a pretty solid probability. And of course, the CME's FedWatch tool, those numbers are derived by polling professional and hedge fund future interest traders. So it tends to give us some solid numbers. Before we continue with the video, let's talk about a question that a lot of gold investors and owners never ask. We've covered gold's rally a lot on this show. We've talked about the central bank buying behind it and all the macro drivers behind the massive run-up in 2025. But regardless of whether gold returns to a bull market next year or pulls back more, the real question is whether your gold is actually working for you. Now, most people buy it, store it, pay to store it, and then just wait. That's where today's sponsor, Monetary Metals, comes in. Through their gold yield marketplace, investors can earn up to around 4% a year on gold paid in gold, not fiat currencies, not dollars, actual gold ounces. So instead of only waiting on the price to appreciate, you are adding to the amount of gold you own without having to buy more. The gold stays your asset the whole time, and it can be redeemed at any point. Is there a particular level above which you would be even more confident in gold's upward trend? Absolutely. Let's assume that gold continues to go up over the next weeks or two weeks or month. This resistance area seems to be the one that has the potential for providing stronger resistance than what I labeled as R1. And that's simply because it matches up with the 38.2% Fib retracement. And the FIB retracement data set begins up at 47, 48, it's the second of the all-time record high, not the first, down to 4,000, so a pretty large spread. I first want to see it break above this because that's going above these candles and wicks, but let's assume that it, in fact, breaks above this on a closing basis, not just the wick. Our next real solid target is about 4,400. Okay. And I think if it goes there, that's still an exceptional year. So I think to sum up, Gary, just on gold, if someone were to ask you, hey, look, Gary, gold's been having a rough year. I bought in maybe near the hype last year. I know some people who did. And I'm not sure if I should be selling, holding, or buying at this point because I'm already down and I don't know what to do. Is this bear market over for now? How would you answer that in layman terms? In labor terms, I would have to qualify it. So if the investment dollars were meant as a long-term investment rather than short-term trading strategies, I would look to hold. But even more than that, I would have allocated a certain amount of money to do the initial purchase and have one or two buys in case you can get the favorable pricing because Because you're under the belief and your model is telling you that. That while it will stair step up and stair step down, dollar cost averaging in a market that's ultimately bullish, but has some pretty deep peaks and valleys, tends to be the best way that you can effectively lessen the probability of losing money and maximizing the ability of keeping more positions. It's not at the most favorable price you had, but at a better price, Gary, would there be any stock market indicators that would point to you how gold would perform either up or down? In other words, if we have a huge sell-off in the tech sector, for example, which happened last week, and if that were to continue, would that have any material impact on perceived safe haven assets like gold and bonds? That is one of the few principles, what I call A plus B equals C, that hasn't pivoted. It hasn't changed. What I mean by that is high inflationary expectations used to create bullish headwinds for gold. It now does the opposite. However, when you're talking about the particulars you are, If it were to spike down heavily, I would rather try to dollar cost average and add to that position. But you would want some point of a golden parachute. But I would look at a dollar cost averaging because I believe long term it's in a bullish market. The question is how long of a term? In other words, what do you have to wait? I look at it like the real estate market. There's There's booms and busts and that, but typically over time. 10 years, 20 years, 50 years, real estate performs. The same with good stocks. A quality stock might give up 25% or 30% in one given year for whatever, but if it's still a quality stock producing a product or service that people desire, that is what I call noise in the market. You want to use that to your advantage and dollar cost average. One of the big mysteries of why gold performed the way it did this year is the notion that gold acts as an inflation hedge. I think it's safe to evaluate this at least in 2026, given that we're almost at the end of the year now, Gary. Like we referenced earlier in the interview, gold has been rising in recent days because oils, well, partly due to the fact that oil is falling. Well, I don't know if I should have. Well, you're absolutely correct, because we're all looking at the same quagmire, so to speak. And the quagmire is traditional reactions to certain markets moving one way or the other have kind of flipped a 180 around their head. My sense is that over time, because gold is paired against the dollar, meaning it trades against the dollar, so there's that reciprocal 100% correlation, that if equities go down, It's not going to be a matter of them going down. We've had tremendous crashes, don't get me wrong, that have lasted huge amounts of time and wiped all kinds of people out. But in all of your classic Wall Street and any of these shows and the old adage you buy when there's blood on the streets, what they're referring to is that If it does correct, then it corrects in an exaggerated manner, that it's technical selling, profit taking. But for the most part, if stocks are selling off, the reason I believe gold tends to sell off is they need liquidity to cover their margin calls. And so gold is something that they can take and use to obtain that capital to cover positions that they don't want to liquidate. And I think that that will continue to be a tenet of trading philosophy. So if you see- Important point, yeah. Yeah. Yeah, that's an important point. And just, can you elaborate on that? Someone would ask you, hey, I've noticed stocks are selling off hard, but gold's also going down. I thought gold was a hedge. How do you answer that? Well, typically they are, but we've got two instances that they're kind of throwing off its feet. That's neat. Higher inflation usually results in bullish tailwinds for gold. However, what happens now is if. Oil's going down. It occurred because, excuse me, if oil is going down, it's less inflationary. If oil is going up, it's more inflationary. But as it goes up, that should be bullish for gold. But rather than that, it seems like the money is not going into the safety of putting it in gold, but rather it is funneled into the Federal Reserve through dollars. And then That takes that whole ideology of lower oil, which is less inflationary and has gold do the opposite reflect effect. And that's because many traders, especially professional institutional traders that have some leverage, are liquidating everything they can to cover that position and hold on because they believe this too will pass. Mm-hmm, good. I'll catch, mate. I think people might be looking at gold and wondering to themselves whether or not it's very much a sentiment-driven market. In other words, if investors are feeling a lot of fear, they move into gold, and if they don't, they move into stocks. Have we witnessed that in the past few years? Is there any evidence to either support or refute that? I've witnessed both sides of the fence, but what I'm witnessing now that's more brutal than ever is the opposite of gold or oil moving up. Meaning higher inflation expectations and then gold moving down. And that's because people have gotten so used to interest rates sitting where they are. What did we have? One hike, we're sitting between three and a quarters and three and a half. It's nothing like the days of getting a 7% mortgage or 10, or God forbid, back in other years, 14%. I think that the key fear to Americans, citizens around the world. That are have accumulated debt and have to pay off that debt when their vocation doesn't really keep up with the inflated prices of all of the markets that move up. And that's because our societies depend so heavily on oil. Oil is the catalyst here. And the reason for that is the intense military action Iran between the United States. I believe that If and when, and I hope I could just say if or when that happens, that's when we'll see a settling down. That's when the sand will come back down to the ground. The knee-jerk reaction that we're witnessing right now is the fact that oil spiked to 100, and up until recently... It went from above $100 a barrel, and it's now pushing down, still elevated, still in the 80s, I believe, but nonetheless, we're not looking at a $100 barrel of oil. Yes. Thank you. I don't know what percentages, Thank you. Thank you. I'm just going to throw a number out, but it could be as much as to Thank you. Thank you. Yes. 40 to 80 percent of the goods Thank you. s that are produced have a component of it using Thanks. Thank you. Thanks. Thanks. petrol. We are a petrol society. s Yes. So that changes the formula for any manufacturer. Thank you. Thank you. Yes. Thank you. Because if they're paying more for it, It's not quite there, but that's fine. That's fine. how are they going to do the same profit? Yeah. All right. So, we're going to go ahead and get the first question. And when people are pinched, Yes. they don't necessarily want to raise their prices because the consumer Have you ever had the impression, and you know, you never had an idea that you're will walk away from it easier. And the bottom line is, it doesn't do anyone good when we see specifically goods but to grease services go out of whack in terms of cost in such a short period of time. Well, is there any downside risk that you would place a high certainty or high probability to for gold? We've talked about the tailwinds, but if any of the headwinds that have pushed gold down were to continue, what would those be? There's a couple of things. If the budget deficit goes way out of control. Oddly, we're not seeing the same kind of reaction to the safe haven in gold when the military action came in this time. I don't know if individuals are jaded to it, but if at the root of your questioning, is there a point in which if we're holding onto it even long term, is there a point we want to get out? And the answer to that is, what is the... Strategy behind you accumulating gold. So this only goes for me, and I don't recommend it to anyone else. There is inherent risk, but I believe in this philosophy, and that is I buy small and incremental amounts. It's basically the old Ronco thing. It's set it and forget it. I just keep it in the safe. It doesn't make me feel good if I bought it at $4 and it's at $35. My average price is $1,500. I don't ever see it going back there. I do have some at high prices. I did buy on the highs, but because I kept buying little and littler and littler, the positions I have at an absolute ridiculous price only comprise maybe 6% to 8% of my portfolio. The best way is a pyramid scheme, but you do it in reverse. What's an absolutely ridiculous price for you? For gold on the upside or downside? You know what? Great question. Why not both? Ridiculously expensive from ridiculously cheap to the point where you would buy with both hands and feet, yeah. Where I would auction my wife off, you mean? No. Or sell your home, but, you know, basically just put a lot of things in, yeah. As long as I can... You know, when you look at it, realize there's a way to answer that. If there was peace on earth, there's things that we, and wages went up, and there was prosperity, and not a lot of issues, that's a much more difficult scenario to attempt to draw a conclusion. Now, on a technical basis. You can see this is my minor support level. It doesn't have a long history, but it wasn't moving up straight. This is not a parabolic, but almost parabolic. And which is why I have that green arrow here at $3,869, a ridiculous price where even myself might throw in the towel, although I've got an earmark for my kids, so they'll just get cheaper gold, but it would be about $3,500. That's, that's, I'm not giving any probability except that it's a ridiculous number, 3,500. Okay. And you want the upside. Yeah, upside, please. Yeah. I don't, now this isn't by the end of the year either. Neither of these scenarios are. The first. Achievable number, it might take two years to go, but it's not yet ridiculous, is $47.50. Then you look to this higher high, $49.75, that came in. That is not ridiculous, but ridiculous. These tops up here, mark my word, they will get hit again. However, I don't believe you'll see it this year or in five years, maybe in 10 years. These numbers have already, they're a benchmark number now. $5,000 gold has been achieved. And because of the intrinsic value of gold and the way that it's so important when it's paired against a currency, even though we have fiat, it's a modified fiat. In other words, it isn't that zero amounts of gold. protect dollars of any denomination and of any country. It's a loose amount of gold, and I don't even know those values. But there is some gold that's earmarked to cover gold, I mean, to cover catastrophe. And so a ridiculous number would have to be above 6,000. Okay, well, we almost got there this year. Well, we got to 57, but we're not there. And that's why it's not so ridiculous. But it's kind of like you take the best basketball player and he shoots and he hits it. No net, beautiful thing. He does it 10 times in a row. The 11th time is probability-wise, well, flipping a coin, it would be, again, 50-50. But in the case of some individual doing, it can't be how tired is his hand, how jaded is his ability to do it. That's the kind of scenario that you want to look at to see where that market could go if it goes up. I've heard ridiculous numbers, 6,000 being a small one, 10,000, 20,000. And I've heard these years ago. And I laughed then when I saw 5,500, I started to seriously can think if the people calling for 9,000, 10,000 weren't wearing tin hats, but it was alarming and surprising to all of us. It was surprising to most people that I interviewed last year when it reached $5,000. But let me ask you one final question. I want to ask you this now on the 9th of November. And I want to ask you again, I'm sure I'll see you in a couple of weeks before the end of the year and right after the Fed makes a move come their December FOMC meeting. Maybe they'll raise rates. That's the market prediction for now. Maybe they won't. We'll see. But. What do you think, if you had to speculate, what do you think will happen to gold in 2027? Will gold be having a positive year in 2027 as opposed to this year in which it lost? Let me give you the exact number. Gold was down this year. Well, counting from January 1st, not the late January high, gold is down about 5%. And that is a crazy question to ask. I would think that it's going to come down to, and even though I'm not a technical trader, I'm not a fundamentalist, because you need both of them. It's called a hybrid trader. Depending on the outcome of the economies worldwide, depending on the resilience of civilizations, countries to work together or not to work together, The... Basic gestalt of this little rock spinning around the sun and how we get along and how we manage to at least somewhat share the wealth, take care of the people that need food, buy mostly the people that have more food than 10 generations will have, depending on various factors. And of course you've got to throw in how much gold is left in reserves, I don't know, or any of these things. It's going to come down to how brutal it is economically, personally, militarily, or how safe it is between countries in the United States and the world. Great. Gary, appreciate your time. Again, we're going to follow up soon. So I'm curious to see if your opinion has changed in a couple of weeks, given no doubt the volatility that we may experience in the next couple of weeks. Thank you so much for now. Where do we follow you? Well, thank you for asking. Thegoldforecast.com. This is our primary channel. That's where we produce and air a daily video newsletter. We have a huge library, about 3,000 daily shows on YouTube. And as I've done a couple of times, we don't do that this often, but if you type David Lin in the coupon box, you will get 30% off the normal price of our premium subscription. I highly recommend you take advantage of it. We don't offer it that much. And if you're one that's studying and that's not available to you, go to the YouTube channel that will give you thousands of tape and you'll get knowledge, just not knowledge that you can use today, but it will allow you to build a base of understanding. So sign up for our premium service if you believe it will give you value, and I truly do believe it will, and to our YouTube channel for those that are younger students, people just getting started, where they can see hours upon hours of our work. Okay, good. We'll put the links down below. Thank you, Gary. Thanks for having me. Thank you for watching. Please do like, subscribe.