I’ve been tracking gold’s trajectory using logarithmic regression since 2020. What we’re seeing right now—this huge parabolic move—is actually quite similar to the pattern from the 1970s bull run. While the price looks pretty extended, trying to be a "hero" and call the exact top is incredibly difficult. For example, relying on simple indicators like the monthly Relative Strength Index (RSI), which is currently very high, can be misleading. Back in 1973, someone who sold based on an extreme RSI missed out on a 600% gain over the long term, even though they avoided a short-term 30% dip.
My base case remains that commodities, including the gold, silver, and palladium I hold, will do well for the entirety of the 2020s. I do believe a significant correction is coming—I'm anticipating a 20 to 30% drawdown from the eventual high, with the low likely hitting sometime in 2026. This won’t be the end of the bull run, though; it should set up a macro higher low before gold pushes even higher.
A big part of my strategy is managing risk. Gold has actually been outperforming the S&P 500 since 2022. I'm keeping an eye on the S&P-to-Gold ratio, which is nearing a breakdown level. If that happens, risk assets could fall much harder than gold. So, while you might skim some profits, I’d caution against selling your gold and jumping into overly risky assets. Stay safe, everyone!
