by Bill Downey     Price Analysis of Gold and Silver
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Technical Analysis Trading Gold, Trading Silver/ analysis By Bill Downey providing key turning points & charts for investors and speculators in Precious Metals Trading, and Precious Metals Markets

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Gold remains in a downtrend on all timeframes

09 Jul 2015 12:08 PM | Bill Downey (Administrator)

 

Gold Report ~ July 9 2015
Trend
Long Term ~ Bearish
- Need a monthly close above 1800 to confirm the bull market final phase underway. Need a monthly close above 1560 to neutralize the trend.
Medium Term ~ Bearish - Need a monthly close above 1255 and 1255 to remove bearish trend.
Intermediate Term ~ Bearish– Need close above 1222-1232 for higher TREND.
Short Term ~Bearish– caught in a sideways market


Initial Resistance 1172-1182  2nd tier 1187-1192
Support 1140-1150 2nd tier 1120-1130

Gold Short Term

A look at the very short term hourly chart had gold making a low on July 2nd and turning back up.  This was in line with expected short term cycles but the yearly support point we have been using for quite a while (1172-1182) has now become 1st overhead resistance.  Indeed, after two tries at clearing 1172 failed, another round of market weakness sent gold to a lower price point on July 7th reaching just a tad under 1150.  That is in line with current support 1140-1150, but this 1140-1150 area is not some major support point but rather just short term. 

Gold hourly price chart

 
Therefore we can quantify the short term and really all trends until gold retakes 1172-1182 and makes it support.   A close above 1187-1194 will be required to give some semblance of a short term bottom. 

The one other thing to keep in mind is on a seasonal basis,  gold often makes its lows between June 21st and early August.  An average of those lows gives a mid July point.  Because gold is in a downtrend on all timeframes, a seasonal turn cannot be the only basis for a trade to try and take advantage of an upside move. 

For now the bottom line on a short term basis is gold must close above the 1172-1182 (somewhere above 1187-1194).  That 1172-1182 area was YEARLY support and should be considered an important price point. For now, it should be considered resistance until we get back above it.
 
Cycles

The last cycle was July 1st (plus or minus 72 hours) and gold did make a turn (see above chart) on July 2nd.  That turn had good odds of putting in a bottom and moving higher to mid month but the persistent weakness in gold and the double failure for gold to overcome 1172 had gold move lower to the 1150 area.    

As you can see, gold is trapped in a wedge between the higher and lower channel lines and we will need a price break out of this area before a more sustained move can develop. I had anticipated gold would trade up to the downtrend line in conjunction with the 50 day (blue line) near 1187 and/or the 200 day (red line) near 1200.  While it has not yet occurred it is not out of the question for gold to rally to this area.  The bottom line on the chart is really the key.   If this area gives way and we take out 1130, odds will be high gold will be heading towards 950-1050.

Gold cycle

In summary, gold remains trapped in the same wedge and price confusion that has been in play since the week of March 21st.  While an upside breakout is possible, the odds are in favor that gold is going to make another new low this year and the final bottom should occur between Oct 2015 and June 2016.  The next short term cycle is due July 16th (plus or minus 72 hours).  If we break below 1147, it is favored to make the July low.   Otherwise, it’s still possible for gold to move higher and keep the red cycle high/blue cycle low we have on the chart intact.    That rotation would be much better than the red cycle becoming the low points and the blue cycle the high points because that rotation will favor continued weakness in gold.  
 

HUI
Medium Term – Bearish
Medium Term Moving averages – 173.06 - 179.84
Intermediate Term Moving averages – 154.96-157.07

On the downside we pointed out we could move lower to the other support line at around 140 and it’s the last real support before new lows that would extend back 10 years.  As you can see on the long term chart, we are/have arrived at that point.
The bottom line analysis at the moment is gold stocks are bearish on all time frames.  We need to see action back over the moving averages in an impulsive manner to change the outlook.  Gold stocks usually bottom during July/August and rally from mid August to mid October.  But that’s during a bull leg.  Still, we should see some type of action of that manner once a low is established. Support is that 140 area at the white trend line.  A move above 158 would suggest gold stocks can set up for a short to intermediate term rally.  Odds are high for a rally in gold stocks due to begin during July/August.  If we move to 140 and the white line odds will be high for at least a short term rally and perhaps during the summer.  But we must see some bullishness before just jumping in.  As we can see on the longer term chart below, we need to hold at around 140. 

Hui Gold stock index long term Chart 

 
Gold Medium Term
Long Term Trend ~ Bearish since Oct 2013 @ 1361
Long term Moving averages 1350 – 1429
Medium Term Trend ~bearish – Moving Averages 1201.65 – 1209.26

The big question is gold getting ready to break to the 1050-1100 area?  We think the answer is yes but we are not sure on the time specifics. This chop that gold has been in is a prep for that action to take place.

IF gold breaks lower here, odds would favor we’re heading towards 1050-1100 and probably where the major long term red lines reside.  However, a weekly close above 1225 and then 1255 would begin to favor a rally in July/August.
The BULL/BEAR line is at 1172-1182 area.  Any weekly close below 1158-1163 favors lower that the area has become resistance for gold and has to favor lower prices. On the upside we need a weekly close above 1225 and then 1255 to get some action to the upside going.

The bottom line to gold is that DUAL YELLOW downtrend line has kept the action in check on the upside for quite a while.  As long as price is below that line,  the bear market in gold is still in play.

Gold weekly price chart 
 
GOLD ETF GLD
Moving Average Trend ~ 113.28– 113.35 – Neutral/bearish

We rarely display the GLD long term chart but today’s update has it in all its (non) glory.

Resistance is 118-121 and support at 108-110 and that’s the range we keep trading in.  Those two white lines are the last real support is 98-105 and near the 84 area.

When we talk about 98-105 and even 84 the majority will scoff at its likely hood.  But they are the same group that has been telling us gold is about to make its low and rally to 10000 for the last three years.   Most are in the business of selling physical gold. I think you can figure out the rest.  


Technical Analysis :: Gold & Silver

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