Why won't Gold break out?

 

Above is gold 2 year chart.  It's gone nowhere!  How maddening!   What a dog!

Above is the gold 10 year chart.  A bit better.  But really, not great performance!  What the hell kind of investment is that?

The gold 20 year chart.  Whoa.  That's more like it  that looks pretty good.  Not only that it's forming a long term Cup and Handle pattern   But how long will the handle go before another breakout?

Nobody knows.  But this is the point of owning gold in a period of unchecked money printing.  Over time it is an awesome investment.  During any period of a few years however, it might seem that a partifular currency is strong and stable.  Like the US Dollar.  

If you had owned gold over the last 2 years in yen or yuan or rubles or euros or rupees you'd be sitting at an all time high in the gold price.  But the dollar has been the least hideous of all currencies.  It has it's flaws: a massive debt, a massive current account deficit, a quadrillion dollars of unsecured derivatives written against it, and an active de-dollarization campaign being waged by China and Russia.  

BUT it's has the benefit of the world's deepest and most stable stock market as an anchor.  And that is what is keeping gold from breaking out in dollars.

What will or could change that?

Only one thing: the stock market finally topping out will start the rush to gold - And then a loss of faith in the Fed will send gold to the next level.

What could provoke such an event?  Another long term capital event, Another S and L crisis, Another housing debt Crisis, Another Covid type crisis, or any new crisis that will cause the Fed to have to print massive bailout trillions while inflation is soaring.  (How about a sovereign debt crisis infecting the world's banking system for example?)

It will happen.  Nobody knows when.  But in this environment sooner rather than later.

Patience.