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 close to breaking down towards 1100

16 Jul 2015 8:18 AM | Bill Downey (Administrator)

 Daily Report ~ July 15 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– market remains in trouble for the downside

Initial Resistance 1155-1162  2nd tier 1172-1180
Support 1140-1145 2nd tier 1120-1130

The monthly chart below shows the 2005 trendline that crosses under the 2008 crash low is now violated and that means the potential for gold to fall is increasing.  There are various supports on the shorter term timeframes but on this long term timeframe, the 1000 area is the next major support.  Unless we see an abrupt turnaround this week, the odds favor the potential for gold to sell off further. 

Gold Monthly price chart
 

On a shorter term timeframe if we take out 1140 then the 1120 area becomes the likely first target.  Additional support near 1100 on a short term basis. 
 

GOld short term price chart

Cycles
We will present two charts today.  The first chart below has the last blue cycle very weak and now we approach the next red cycle turn due July 16th (plus or minus 72 hours) it is possible that we have already begun the red cycle and it if that is the case then the potential for a hard sell off is high.  Since the next cycle window can last as long as until the 19th, it is not out of the question for gold to try and mount a rally today and tomorrow.  But like we said, it is also possible that the next red cycle down is underway.  We won’t know for sure until early next week.   Lets go to the 2nd chart.

gold cycles
 
The chart below shows an inversion where the rotation would flip from the lows at the blue cycle to the lows at the red cycle.  We give this only a 25% odds that it is occurring but if it is, it means that gold could rally out of this scenario into the end of the month.  However, it would further complicate gold as red cycle lows are not trustable and usually means a bear trend overall. 

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. 
 
At this point in time the odds favor that gold is going to begin to head lower.   We may see a push higher into the end of the week, but its best to remain bearish overall.


HUI
Medium Term – Bearish
Medium Term Moving averages – 150.78 – 152.93
Intermediate Term Moving averages – 147.63 – 150.59


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.  Even the 2008 crash low trendline at the bottom of the chart has given way and both attempts at a rally during June was met with resistance at the moving averages. 

Odds are high for a rally in gold stocks due to begin during July/August but we must recapture that line at 140 and move above the averages in order for gold stocks to show that it is making an attempt at reversing. We must see some bullishness before just jumping in because all attempts have failed and we are basically making 10 year lows in gold stocks. 
 
 


Gold Medium Term
Long Term Trend ~ Bearish since Oct 2013 @ 1361
Long term Moving averages 1350 – 1429
Medium Term Trend ~bearish – Moving Averages 1200.83 – 1205.22

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 ETF GLD
Moving Average Trend ~ 111.89 – 112.53 – Neutral/bearish

Resistance is 113-115 and support at 108-110 and that’s the range we keep trading in.  Those two white lines are the last real support until 98-105.  The bottom line is unless gold turns here, look for the 105 area to tested in GLD.


 
GDX
Intermediate term Trend   17.50 – 17.87 ~ Bearish
Resistance is at 20.08 – 20.22
GDX has broken the 2008 lows and until we reverse back above it all signs are bearish.
 
 

What next ?
All trends in gold remain down.  Even the short term leaves a lot to be desired.  From that perspective gold needs to re- capture 1172-1182 and make is support.  Until then the odds have the downside in play.

Bottom Line
June often is a turning point but it can extend into July.  We have seen divergence in other markets but gold has yet to show any action that warrants upside.   Indeed, a closing below 1140 this week will keep the pressure on gold.

It’s best to favor lower at the moment and the potential for gold to move to 1100-1120 soon is most likely in play.   The only other potential and it’s only at 25% odds, is that the short term gold cycle inverts.   Thus its not something we should bet on, at least not until some type of bottoming action is seen in gold.


Technical Analysis :: Gold & Silver

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