Transcription
Hey everyone, and thanks for dropping back into the heavy metal verse. Today, we're going to talk about gold, and we're going to be discussing the path for the rest of the year.
If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on ITC Premium at intothecryptoverse.com. And as I've said before, make sure you check out the first ITC conference, Investing Through the Cycles. We're going to have it, uh, November 20th through the 22nd in Miami, Florida. Hope to see you guys there. Let's go ahead and jump in.
So, gold is trading right around $4,000. And we've talked a little bit about kind of what to expect in the midterm year. If you're new to the channel, one of the things that we said previously was look for gold to have a large correction in 2026. Um, and for it to find a low probably sometime between, you know, June, July, going all the way out till October is is when it, as late as it could theoretically happen, before it starts to find a bounce back up.
Now, one of the reasons I say that is is mostly due to seasonality. If you look at the year-to-date ROI of gold in 2026 and you compare it to say 2022 or 2018, you'll see that gold in 2026, as measured from the yearly open, is basically the same as it was at this point in 2022 and in 2018. And so it's still tracking, right? It's still tracking what it normally does. Now, the lowest, as measured from the yearly open, that gold got in 2018 and 2022 was around, you know, 10, 11% down from the yearly open. Gold this, you know, in in 2026 has gone about 7, 8% down. So you could argue that while gold might go a little bit lower, it probably wouldn't go that much lower this year.
Now, of course, a counterpoint would be that it went a lot higher, so maybe it it could go a little bit lower. But when I think about this stuff, I think about like, when is the most likely time for gold to bottom? You know, could it bottom soon? Uh, could it take a little bit longer? One of the things to note for gold is that recently it actually had a death cross. But a lot of times when you have death crosses, you have rallies in the short term. And you can actually see we had one. If you look at at when gold crossed the 50-day and the 200-day, you can see you had a little bit of rally on the other side of it. But and if you go back to 2022, you can see kind of the same thing, right? You had a death cross. I guess it sort of dumped right initially, but you had sort of this rally back up to the, uh, to the 50-day moving average. We haven't even had that. We haven't been to the 50-day moving average since May. So, it's been a few months.
But the point that I'm trying to make is that, you know, if you look at the year-to-date ROI of gold in 2026 and you compare it to 2022 or 2018, you can see that back then it took until like September, October for gold to bottom. But here's the reason why I don't want to overpromise that. Because while in 2018 and 2022, gold didn't bottom for a few more months, it didn't go that much lower. But the bigger point is if you actually look at the average of all of these midterm years going back to the late 1960s, early 1970s, and let's go ahead and hide 2018 and 2022. On average, gold bottoms in early July of midterm years on average. Even though in 2022 and 2018, you can see that it it took a little bit longer.
Now, the reason why is because you probably had some pretty big drawdowns at some point in that in sort of that part of the midterm year. Um, you can see in 2014, uh, gold didn't bottom until November of that midterm year. You look at 2010, uh, you can see it was actually had a relatively good year, but it did find some weakness into late July before heading higher. If you look at 2006, again, a big drop into like late June, early July, uh, didn't go any lower than where it was in June back then. And you look at 2002, you can see it also found a low in sort of like late July. It was a higher low. But again, the point of this time-based analysis is not to say it's a lower low or it's a higher low. It's just like when would it find a low? Um, and then you could also, of course, look at like 1998 and see that it it found a low in in late August. So there's no way to know exactly when, but my guess, my guess is that gold would likely find a low between say July and October.
And one thing I want to be clear though is that you might say, well, gold has been struggling, whereas the stock market has been doing okay recently. And that's true, right? Like that is absolutely true. So if you if you look at the valuation of the S&P against gold, you'll see that it S&P's rallied against gold recently. Um, but the point is we have seen these rallies before even after breakdowns. If you look at at, you know, prior eras, we had the S&P rallied at the same era level of gold against in back in 1973.
But the point is, is when you look at the overall S&P bull run, right? When you look at it and you look at at prior drops back in 2008, we had this massive drop, okay? And going into 2009. Now, I'm not saying we're going to get that. But the point is, is when we had that, gold was a lot weaker initially, but it came out of it a lot stronger and got to all-time highs a lot quicker. So, if you look at this, the S&P topped in October of 2007. Now, this is what's crazy about this. If you overlay gold onto this chart, what you'll see is that gold actually found a low in October 2008, whereas the S&P didn't find a low until about half a year later. Now, what's crazy is that gold was basically back at all-time highs by 2009, only a year and a half or so after it topped. For the stock market, it took from '07 all the way out until 2013. So, it took a lot longer.
Now, we already, you might say, "This doesn't really make sense to compare." I agree. It's not 2008, but we already got a glimpse of this is the point I'm trying to make. If you look at the S&P 500 and you think about kind of the last big crisis we had where the market was really starting to worry, it was during the tariffs, the tariff tantrum back in early 2025. Now, what's remarkable is if you overlay gold onto that that scare, you'll see that gold barely dropped, right? Like it barely dropped and it recovered relatively quickly.
So, the point is, is, you know, yes, gold has had a pullback. We said we're likely going to have this pullback in 2026, but ultimately I think it's going to set up for the continuation for a move back up starting as we get later into 2026, but especially going into 2027. That's my guess as to how this plays out. Now, I could be wrong, but and you might say, well, you know, gold's already dropped a ton, so you know, is it is it is it worth considering that that view might be wrong? And maybe it is.
But when you look at at the bull market support band for gold, and now remember the the bull market support band I use for gold is different than the ones that I use for Bitcoin. For gold, I use the 20-month simple moving average and the 21-month exponential moving average EMA. And if you look at the bull market that we had in the 2000s, you can see that gold would find support at this bull market support band for the most part. Sometimes it would not quite tag it, which is why I don't generally recommend like waiting for it to tag. But you can see there was one fake out below it when we got the recession. But ultimately, gold recovered out of that recession much faster than stocks and continued to go higher into the end of the decade and early into the next decade.
Now, if you look at the massive bull market we had in the 1970s going into, you know, the early 1980s, you'll see it was also finding support kind of near that bullmark support band. And at one point, we did break down below it right as we had that recession, but it recovered. It went on to new all-time highs and it drastically outperformed the S&P 500. Now, the point I've tried to make is that in both of these massive bull markets for gold, they were interrupted by a recession in the United States. And during that recession, gold did struggle, but it came out of it a lot. It came out of it fairly quickly. And it also recovered much faster than the stock market is the point.
So stocks are still doing well, and I don't think stocks are going to really start to get another drop until August or September. And I've said that very clearly that we should have a shallow correction in June by stocks and then a rally back up in July and then probably a larger drop in the August, September time frame.
Now, if you look at where the the bull mark for gold is right now, it's currently at around 3,800, like 38.24 to 3841. We haven't even tagged the bullmark swap band for gold since 2023. It's been a long time, you know, and and I don't know how much longer this is going to play out, but my guess is that we'll find a low within the next few months and then we'll see it bounce off of that.
Now, if I'm wrong and the bull market is over and there's not another move after this, I would still expect it to bounce off of the bull market support band if not before it, right? It would still likely bounce, making me think I'm right and then I would be wrong. So that's kind of like what I'm looking at here is like, yeah, like I could be wrong, but if I am, I still think you would have a several month rally, uh, that would make me not believe that I'm wrong. I think that we're more so in one of these corrections where, you know, it could be like 2006, um, where, you know, you're not really in a recession. It it you you get a big drop. It might not look that bad, but everything looks not bad when you're not living through it. But back then, gold did drop about 26%. If you compare that to what it's dropped right now, it's about 28%. Right? Like it's not that different. And back then, gold did not actually tag the bull market support band, right? In 2008, it did.
My thinking is this is a lot of these gold bull markets can last, you know, 10, 15 years, or it depends on exactly when you measure it from. Um, you know, if you look at the one we started, uh, we started one in 1999 and it went all the way until 2011. So I guess about like 12 years or so. Um, but if you, I guess the way I'm thinking about this decade is you have your initial move up sort of going into the early part of the decade, right? You get your first consolidation around the the the the 2022 midterm year. It was a little bit on either side, but let's just say the core was 2022. The next one is 2026. And then I think that leads to further consolidation and then leads leads up to the final move that kind of ends the decade. And it might even go into the early part of of 2030s. Absolutely.
You know, in in midterm years, gold can struggle. And on average, it does, but I do think it'll come out stronger on the other side of it. I'd be looking for a low for gold to form sometime between like the July to October time frame and and then from there to to start to show strength once again. That's my guess. That's my thought process for how gold will play out for the rest of the year.
If you guys like the content, make sure you subscribe, give the video a thumbs up, and again, I'd love to see you guys at the conference. Check it out. The Investing Through the Cycles conference. I'm sure we'll be talking about gold at that conference a lot. It'll be quite timely because by that point, there would be a really good chance that the low would be in for gold because it's not until November. So, make sure you guys check it out. Would love to see you guys there. Thank you guys for tuning in. Subscribe, and I'll see you next time. Bye.