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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Bill Downey, of Gold Trends.net, LLC, is an Independent Investment Analyst with over twenty years of study. YOU SHOULD NOT TAKE ANY MATERIAL posted on this WEBSITE AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED. Do your own due diligence. No one knows tomorrow's price or circumstance. The author intends to portray his thoughts and ideas on the subject which may s be used as a tool for the reader. GoldTrends does not accept responsibility for being incorrect in its speculations on market trend or key turning points that it may discuss since they are at best a calculated analysis based on historical price observations.

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  • 17 Aug 2015 10:03 AM | Bill Downey (Administrator)

    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 to remove bearish trend.

    Intermediate Term ~ Bearish– Need close above 1172-1182 for higher TREND.

    Short Term ~Neutral– Market short term cycles due to peak between last Friday and this Tuesday


    Initial Resistance 1128-1135  2nd tier 1154-1160

    Support 1103-1112 2nd tier 1072-1082

    Our last resistance listed 2nd tier at 1122-1125 and the price high since then has been 1126.  

    We have often discussed in our newsletter that the inflation or loss of purchasing power we see in prices is NOT a result of RAW COMMODITY inflation.  Rather it is a result of massive price increases in government taxes, permits, licenses, fees, services, excise and a host of other charges to support the massive bureaucracy, spending and pensions for the huge amount of employees.  These increases along with massive regulations (also to support government pen pusher jobs) has increased cost to business in a substantial way.  All of these costs are passed along to consumers.

    All of the price increases we have seen since 1998 are a direct result of the above and not COMMmanODITY PRICE increases. 

    On top of all that, the debt levels both public and private has reached a level where it can no longer be sustained and thus the average consumer (who is living on purchasing power the same as it was in the 70’s) becomes more and more squeezed that over the course of time the paycheck buys less and less and now we have arrived at a point where most can only afford food, clothing and shelter.  That means that economies are not growing.  Indeed, it takes non-discretionary spending to spur economic growth. 

    When we couple all of the above with 10,000 baby boomers retiring a day, it can only lead to a global economic slowdown.

    That is what we are now seeing.  And the result this time will not be a recession, but a global debt default which will lead to a massive life change for most of the planet.  

    While there are strong forces that don’t want the price of gold to go up, we should realize that commodity deflation is a very strong factor that is also helping to keep pressure on gold.  

    Commodities sometimes bottom (or peak) earlier than gold and vice versa for periods of up to six months, but they almost always follow the same overall direction.  

    Oil hit a six-year low this week, reaching $42 a barrel.  Odds favor that it will bounce briefly from here, but eventually reach the $32 support level we saw in late 2008.

    This trend in the price of oil, alongside the steady decline in almost all commodity prices doesn’t bode well for the future of stock markets across the globe either.

    Overall, odds favor that the correction in gold is in its final stages, but that does not mean that the final price low is in yet.  Gold has corrected 50% of the entire rally and while that is certainly an important number to watch (the 1040-1080 area in gold), there is still not any evidence that the final low in gold and silver have been made.  Odds favor that Oct 2015-June 2016 is the most likely and favored timeframe for the final lows in metals. 


    Commodity Prices: Predicting a Substantial Stock Crash

    By Harry Dent, August 13, 2015   

     

    I recently explained that it’s one thing for a central bank to artificially prop up its own stock market. It’s another thing entirely to even imagine doing something similar to falling oil prices. What’ll they do – buy oil futures? Give me a break.

    Oil hit a six-year low this week. As I write this, it’s around $43, closer yet to the $42 target I forecast when oil bounced back to $63. After another tepid bounce, it will very likely fall to the $32 support level we saw in late 2008. John Kilduff, a leading oil analyst who will be speaking at our Irrational Economic Summit in Vancouver next month, sees this happening earlier than his original Christmas call.

    But oil just got another kick in the shins this week when China decided to return to its old tricks again.

    The People’s Bank of China’s move to intentionally lowered its currency ‑ to fight the slowdown made all too obvious by an 8.5% decline in exports – is fundamentally no different than injecting $0.5 trillion into its stock market’s bloodstream or buying empty condos to keep its real estate from tanking. It’s one economic manipulation after the other!

    This raised concern over China’s demand for commodities. A weaker yuan probably means fewer imports, and so less demand. As a result, oil and other commodity prices slumped.

    All of this might be just a segue way into a much greater point – the overarching collapse in commodity prices that is already beginning to ravage the emerging world. This will only get worse in the years to come, and will quickly take our own stock market down with it.

    Commodity prices move in a 30-year cycle that has run like clockwork over the past century. Overall, it’s been pretty reliable since the early 1800s.

    We’ve been in a “down cycle” since commodity prices peaked in mid-2008. And in line with the cycle, they won’t bottom out until around the early 2020s – likely by 2023 at the latest.


    There are two major reasons for this:


    No. 1: The demographic slowdown in developed nations, which affects demand.


    And No. 2: The economic slowdown in China


    The Chinese have dominated the consumption of industrial metals and energy for years to feed the country’s rapidly-growing economy and global manufacturing export machine.

    For these reasons, as much as commodities have fallen – 57% overall, and up to 80% in oil and 70% in iron and coal – they still have further to fall in a series of continued crashes.

    More importantly, this continues to be the best leading indicator of the global financial crisis ahead because it affects stock markets in both the emerging and developed worlds.

    Now, I’ve shown before how commodity prices move more in tandem with emerging market stocks. Much more so than a stock index like the S&P 500.

    Look at the chart below. It compares two leading measurements for commodities and emerging stocks: the CRB commodities index, and EEM, the ETF for emerging market stocks:

    commodities

     

    That correlation is plain as day.


    See the evidence for yourself. World-renowned business strategist Harry Dent believes the final and most devastating phase of the financial crisis is just weeks away. 

    But as you can tell, there’s been a growing divergence building between the two since the middle of last year. There’s now a 33% gap.

    That doesn’t mean the correlation has stopped working. It just means emerging market stocks have at least that much to fall.

    They’re already down 36% from their top in late 2007. We’ll likely see that gap close with a breakdown in emerging market stocks in the months ahead.

    I expect the EEM index to hit $18 by early 2017 (a 50% crash from here). Ultimately, I see it going as low as $10 by 2020 to 2023 as commodity prices continue to fall through the years to come.

    At $36, this index is already testing its three-year lows. The final support level is the 2011 low of $33.50. A break below $36 shows clear weakness. A break below $33.50? That would mean curtains for emerging market stocks.

    But like I said, falling commodity prices hurts stocks in developed countries too.

    Here’s a chart to explain:

     

    This one suggests that the S&P 500 is ready to fall as well. And overall, it strongly suggests that U.S. and developed country stocks are about to crash something like 25% to 30% or more.

    This chart shows that changes in commodity prices and forward S&P 500 earnings per share roughly follow one another. When one goes down, typically, the other goes with it.

    If commodity prices fall, it brings global trade down with it. That leaves S&P 500 companies in a world of hurt since so much of their sales are overseas. And since analysts are always looking forward, earnings are going to be revised lower as trade overseas continues to weaken. When that happens, stocks will follow!

    Like I said, I expect a 25% to 30% crash, minimum, in the first wave down in the next stock crash. That’s similar to the recent China crash.

    Such a crash is most likely to begin in the classic crash season between late August and mid-October of this year.

    So be sure to get as defensive as you possibly can in your investments by late August. That goes especially for any bounces in stocks or even oil we might see. They’ll likely occur just ahead before a larger crash sets in.


    Gold Short term


    Gold made its move to the 1125 area highlighted on the last update as a potential and has since pulled back to support near 1110.  The big question now is whether it has more strength and can keep going.  Short term cycles suggest no, but they can invert 25% of the time.  Still it’s a time to be cautious for a short term peak that could last until month end.

    The 50% total retracement of the entire correction at 1072-1080 is key support.  As long as we maintain a close above 1103-1110, the short term uptrend can continue so that’s the first area to watch.

      

    Interest rates

    Medium Term – Bullish for higher rates

    Moving averages 21.13 – 21.06


    The pullback in rates held right at the moving averages on the weekly charts and a move back up to test the long term green channel line is underway again.  The moving averages are turning up and that is a good that that if we take out the green trend line and the white one just above it, higher rates will become the medium term trend.   This time it won’t be because of good economic numbers, but of panic. 

    Yes higher rates will potentially sell gold off, but it will be a fake out and part of the final wave down for gold.  The trend in rates is not far from turning up on a medium term basis.  As long as we hold the moving averages, and then take out the green trend line, odds will favor higher rates.  And higher rates will be bullish for gold.  Perhaps not quite at first, but certainly as the trend accelerates.

      

       

     

    Cycles

    The next cycle turn is due now,  August 14th, plus or minus 72 hours.  The bounce we expected on the last update did occur last week, but it was a quick one.   It’s quite possible that the bounce is complete and prices are ready to turn down to month end.  That is what the odds favor.  But August can be a tricky month for gold so its not out of the question that we can get a cycle inversion (25% chance.)   Other than that we still should favor a pullback to begin to month end.  A close below 1103-1110 would be the first sign that the pullback is underway.   

    Should prices go higher than last week, then look for resistance at 1140, at the 50 day average.  In summary, we should favor a pullback to month end.

       

     

    HUI

    Medium Term – Bearish

    Medium Term Moving averages – 164 – 171

    Intermediate Term Moving averages – 112.21 – 112.63 – NEUTRAL


    We last discussed the medium term trend still being down but a short term bounce to the 120 area could develop first.  That is how last week played out and now the question is whether it has more?   As long as we hold above the moving averages on a closing basis at 112, the potential for higher will remain in play.  A close below 111 will favor lower to month end. 

       

      

    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1350 – 1429

    Medium Term Trend ~bearish – Moving Averages 1190-1200


    Gold supporting at the 1080 price area and the 50% retracement of the entire bull market.  Odds continue to favor gold will attempt a bounce here, but on a medium term basis, there is still no evidence that this will be the final low.  Not that it is out of the question, but it’s not the odds favored point.

    Just the same, odds are high here that gold should hold the 1040-1080 area and at least try a rally attempt during August.   As long as we are below the dual yellow downtrend line, the medium term remains bearish.

       

     

     

    GOLD ETF GLD

    Moving Average Trend ~ 105.23 – 105.17 –neutral


    GLD did find support at 103 and how the test is to overcome the moving averages on a short term basis.  That will be 1st resistance but also that gap in price on the way down at the 107-108 area and the white line at 109 is also resistance.  We got the push to that area last week and now it’s a question of whether we reach the white line at 109 before a pullback goes back in motion.   

     

      

     

    GDX

    Intermediate term Trend  moving averages 13.93-13.87  - Neutral


    GDX has broken the 2008 lows and until we reverse back above it the trends remain down. On a shorter term basis, price did bounce back and fill the gap as favored last week.  With that said, the trend is now neutral and its not out of the question for price to test the green trend line next.

      

      

     

    What next ?

    The bounce to mid-August has been mild and while the bounce can continue to months end, we need to remain cautious as short term cycles could again begin another downturn this week.  Most commodities are in downtrends and thus we should remain favoring the downside overall.


    Bottom Line

    We got the bounce expected last week, but short term cycles favor we are peaking with another pullback to month end.  A close above 1126 would put that forecast into question.  


  • 10 Aug 2015 11:46 AM | Bill Downey (Administrator)

    Gold Update Aug 10 2015

    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 to remove bearish trend.

    Intermediate Term ~ Bearish– Need close above 1172-1182 for higher TREND.

    Short Term ~Neutral– market at short term bottom at 1070-1080 and a rally to 1105-1110 or 1125 expected.

    Initial Resistance 1105-1112  2nd tier 1122-1125

    Support 1072-1082 2nd tier 1040-1150

    Our last resistance listed 1094-1104 and price has just reached 1103 in the last half hour (11 am Mon) 

    Gold Short term

    Our last update favored a potential turn up to 1103-1108 and while the chart shows 1096 as the last, over the course of the last 30 mins, gold has turned up to 1103.  It looks like the 1106-1110 area is the next resistance area and we favor a move there.  Gold remains heavily shorted and thus we should consider this short covering for now.   But there is a decent base that was formed at the 1080 area.  We highlighted the potential to hold there as this area is the 50% total retracement of the entire correction.   In addition, seasonal factors are positive for August as the Indian wedding season approaches and gold buying for Christmas products usually occur at this time of the year.

    Support remains SOLID right now at 1072-1080.   In summary, 1st resistance should be 1106-1110 with the potential to move to 1125.

     

    Interest rates

    Medium Term – Bullish for higher rates

    Moving averages 21.11 – 21.07

    The pullback in rates held right at the moving averages on the weekly charts and a move back up to test the long term green channel line is underway again.  The moving averages are turning up and that is a good that that if we take out the green trend line and the white one just above it, higher rates will become the medium term trend.   This time it won’t be because of good economic numbers, but of panic. 


    Yes higher rates will potentially sell gold off, but it will be a fake out and part of the final wave down for gold.  The trend in rates is not far from turning up on a medium term basis.  As long as we hold the moving averages, and then take out the green trend line, odds will favor higher rates.  And higher rates will be bullish for gold.  Perhaps not quite at first, but certainly as the trend accelerates.

     

       

     

    Cycles

    The next cycle turn is due August 14th, plus or minus 72 hours.  Odds favor the bounce we’ve been expecting should occur this week.  However, it is important to note that the cycle window does open tomorrow and will last until the end of the week.  That favors a high in gold this week with a short term pullback to the end of the month.  If that develops, odds favor that Sept should see a decent bounce.  

     A close above 1103-1108 should lead to a bounce in the 1130-1150 area.  Only a close below 1172-1180 would change the short term picture.


      

     

    HUI

    Medium Term – Bearish

    Medium Term Moving averages – 164 – 171

    Intermediate Term Moving averages – 112.87 – 118.39

    On a medium term basis, the next support is that yellow line near the 90 area.  Gold stocks have now entered the fifth and final wave down.  Either the yellow line holds or a COMPLETE retracement back to where the bull market started in 2001 is going to occur.  For now, the potential to move to the 90 area remains as the most likely MEDIUM term scenario, but a bounce higher this week higher could lead to a retrace near the 120 should develop.

       

     

    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1350 – 1429

    Medium Term Trend ~bearish – Moving Averages 1190-1200


    Gold supporting at the 1080 price area and the 50% retracement of the entire bull market.  Odds continue to favor gold will attempt a bounce here, but on a medium term basis, there is still no evidence that this will be the final low.  Not that it is out of the question, but it’s not the odds favored point.

    Just the same, odds are high here that gold should hold the 1040-1080 area and at least try a rally attempt during August.   As long as we are below the dual yellow downtrend line, the medium term remains bearish.

       


     

    GOLD ETF GLD

    Moving Average Trend ~ 105.23 – 106.25 –bearish

    GLD did find support at 103 and how the test is to overcome the moving averages on a short term basis.  That will be 1st resistance but also that gap in price on the way down at the 107-108 area and the white line at 109 is also resistance.  Odds favor a push to that area short term and then we’ll see.  

     

      

     

    GDX

    Intermediate term Trend   15.50 – 16.87 ~ Bearish

    Resistance is at 13.88-14.42

    GDX has broken the 2008 lows and until we reverse back above it the trends remain down. On a shorter term basis, price should bounce back and fill the gap and test the moving averages near 14-15 and the moving averages. With that said, the trend is still bearish.

     

      

     

    What next ?

    While the trends remain down in gold, we should be nearing a summer low in gold and the miners.  Odds are high that we should see a bounce into Mid August. Support should be 1072-1082.  However any close below 1072-1080 will warn of yet new lows into mid August.

    Bottom Line

    It’s best to remain bearish overall but to expect a bounce of some type here.  The key will be whether it overcomes short term resistance at 1105-1110 and near 1125.  


  • 05 Aug 2015 9:44 PM | Bill Downey (Administrator)

     

    Gold Report ~ Aug 6 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 to remove bearish trend.
    Intermediate Term ~ Bearish– Need close above 1172-1182 for higher TREND.
    Short Term ~Bearish– market should be near a short term bottom at 1070-1080 but a close below 1072 will add to downside pressure.

    Initial Resistance 1094-1104  2nd tier 1108-1113
    Support 1072-1082 2nd tier 1040-1150


    Gold Short term


    Gold still looks very weak and the Tuesday close below 1185 leaves the downside open for more potential damage.  Gold must hold 1072 on Wednesday or lower prices towards the 1033-1050 area will be next.  Any close below 1072-1080 will warn of lower prices.  However, if we hold this area on Wednesday, there is still a potential gold can begin a climb to the upside first resistance area of 1103-1108. But this development must happen soon or gold will soon give way.  In summary, any close below 1072-1080 will leave the downside open for gold and another potential drop into mid-month.


    With that said, gold is oversold and over shorted.  It is still possible for gold to turn up here, but time is running out to do so.

    Gold hourly price chart 

    Interest rates
    Medium Term – Neutral
    Moving averages 21.11 – 21.07

    The pullback in rates held right at the moving averages on the weekly charts and a move back up to test the long term green channel line is underway again.  This comes after Federal Reserve Bank of Atlanta President Dennis Lockhart’s comments that the Fed is poised to raise rates.  This is one of the added pressures on gold at the moment as the control boyz have the crowd convinced that higher rates are bad for gold.  They will only be bad initially. 


    Yes higher rates will potentially sell gold off, but it will be a fake out and part of the final wave down for gold.  The trend in rates is not far from turning up on a medium term basis.  As long as we hold the moving averages, and then take out the green trend line, odds will favor higher rates.  
     
     10 Year T Note rates weekly price chart
      
     
     
    Cycles

    The next cycle turn is due August 14th, plus or minus 72 hours.  Odds favor a bounce develops from here.  A close above 1103-1108 should lead to a bounce in the 1130-1150 area.  However, a close below 1072-1080 will warn of lower price potentials and  a cycle inversion to mid-month. 

    Gold cycles
     
    HUI
    Medium Term – Bearish
    Medium Term Moving averages – 165 – 171
    Intermediate Term Moving averages – 118 – 124

    On a medium term basis, the next support is that yellow line near the 90 area.  Gold stocks have now entered the fifth and final wave down.  Either the yellow line holds or a COMPLETE retracement back to where the bull market started in 2001 is going to occur.  For now, the potential to move to the 90 area remains as the most likely MEDIUM term scenario.  
     
    HUI gold stock index price chart 


    Gold Medium Term
    Long Term Trend ~ Bearish since Oct 2013 @ 1361
    Long term Moving averages 1350 – 1429
    Medium Term Trend ~bearish – Moving Averages 1196-1203


    Gold is trying to from support at the 1080 price area and the 50% retracement of the entire bull market.  Odds favor gold will attempt a bounce here, but on a medium term basis, there is still no evidence that this will be the final low.  Not that it is out of the question, but it’s not the odds favored point.

    Just the same, odds are high here that gold should hold the 1040-1080 area and at least try a rally attempt during August.   As long as we are below the dual yellow downtrend line, the medium term remains bearish.
     

    Gold weekly price chart
     
    GOLD ETF GLD
    Moving Average Trend ~ 106.00 – 107.00 –bearish

    GLD is also trying to find support but is close to giving way to the next support area of 98.  It won’t take much more to move it lower. If GLD is to turn it needs to do so very soon.  Resistance is the 106 area and then 108-111.  The short term trend remains down.
     

    Gold ETF GLD price chart
     
    GDX
    Intermediate term Trend   15.50 – 16.87 ~ Bearish
    Resistance is at 14.30-14.90

    GDX has broken the 2008 lows and until we reverse back above it the trends remain down. On a shorter term basis, price should bounce back and fill the gap and test the moving averages near 14-15. With that said, the trend is still bearish.
     

    GDX price chart
     
    What next ?
    While the trends remain down in gold, we should be nearing a summer low in gold and the miners.  Odds are high that we should see a bounce into Mid August. Support should be 1072-1082.  However any close below 1072-1080 will warn of yet new lows into mid August.

    Bottom Line
    It’s best to remain bearish overall but a bounce of some type can very well develop here.
    Gold needs to close above 1094 and then 1108 in order to favor a bounce to mid month will take place.  But gold is running out of time and must turn soon or face another downdraft.

  • 28 Jul 2015 10:51 PM | Bill Downey (Administrator)

    Gold Report ~ July 29 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 to remove bearish trend.

    Intermediate Term ~ Bearish– Need close above 1172-1182 for higher TREND.

    Short Term ~Bearish– market should be near a short term bottom at 1070-1080.

    Initial Resistance 1103-1113  2nd tier 1128-1138

    Support 1080-1090 2nd tier 1040-1150

    Resistance has been listed at 1115-1122 and the high since the last update has been 1108.  Support has been listed at 1080-1090 and the low has been 1077.

    The greatest crisis we face is the destruction of liquidity that government is causing by their hunt for loose change. Their desperate need for money is tearing the world economy apart at the seams. Even in Europe, the attempt to force a political union upon people by denying them the right to vote is ripping apart the cooperative connections established following World War II with the Treaty of Rome. The forced monetary and political union in Brussels undermines what they were trying to create – European Peace. (Martin Armstrong)

    The game is afoot to eliminate CASH. According to reliable sources, Maestro is seriously under attack. In Germany, Maestro was a multi-national debit card service owned by MasterCard and founded in 1992. Maestro cards obtained from associate banks and can be linked to the cardholder’s current account, or they can be used as prepaid cards. Already we see the cancellation of such cards and the issuing of new debit cards. Why? The new cards cannot be used at an ATM outside of Germany to obtain cash. Any attempt to get cash can only be an advance on a credit card.  (Martin Armstrong)

    The CME has closed floor trading, which I contend will add to the crisis in LIQUIDITY. It is true that the argument has been that the floor traders amount to only a small percentage of the actual trading volume. However, they provide liquidity when there are gaps in electronic trading. In the process, many contracts have been eliminated and/or replaced with mini-contracts for retail. There are no more Dow futures contracts. The closure of so many contracts reflects the real crisis we have in LIQUIDITY. (Martin Armstrong)

    Interest rates

    Medium Term – Neutral

    Moving averages 21.12 – 21.07

    We have been watching interest rates for a clue that higher rates are coming.  For a brief moment rates moved above the 34 year green trendline to the next line resistance just above it and rates peaked and have now moved lower back under the green trend line.  Now the key is whether the moving averages become support. The blue line has slightly moved above the red but just by 5 ticks.  If the pullback supports the moving averages and then closes back above the green line, the key is going to be that white line just above it.  If rates move above it, around 26 then the trend will turn to higher rates on the medium term.  We’re not sure if gold will drop one more time, but the key is that once rates begin to move higher, gold should not be far behind with a bear market low.  The key target date for a gold low remains Oct 2015 – June 2016.  However, that doesn’t mean it will be exactly then as that is the most likely time and standard deviation.  The key is we are getting closer to that time frame.  That’s why it will be important to watch rates when they do give a signal that the medium term has turned up.  The pullback has been due to a flight to quality as stock markets have been under pressure since China buckled.  Odds favor the pullback in rates will find support at the moving averages or just below them at the white trend line.

     

    10 year t-notes price chart with support and resistance lines

    Gold Short term

    Gold is finally getting support at the short term blue 89 hour moving average.  The next challenge is the green line at 1103 and the resistance line.  Resistance will be 1098-1108 over on Wednesday.  Options expiration is over for August and the move out of August Futures is underway.  Short term cycles are due and the seasonal turn in miners and gold is also due.  Odds favor a short term rally to mid-August should take place.  Friday is the last day of the month and thus next week begins August. A lot of indicators are at extremes and thus a bounce is most likely underway.  Any pullbacks should find support in the 1080-1087 area.   In summary, we should see a move to 1103-1108 and then we will see.


     Gold Hourly price chart with support and resistance lines


    Gold since the 2014 peak

    Looking out a bit further, it seems gold has formed a price channel that finds support near this 1080 area.  On this view it is not out of the question for gold to make a move back to the 1140-1155 area where the breakdown occurred.  Odds on this chart also favor support in the 1075-1080 area.  

     

    Gold 8 hour price chart with support and resistance lines

    Cycles


    The next cycle turn is due July 31st (plus or minus 72 hours).  That means the window for a turn began today and will run until August 3rd.  Odds favor a low to develop that should be the summer low.   Every now and then we get a turn outside the window as there is no indicator or cycle measurement that meets its window each time.  Still, its best to anticipate one more dip towards 1070-1080.  If we get one it should provide a turn higher into Mid August. 

     Gold cycles price chart with support and resistance lines


    HUI

    Medium Term – Bearish

    Medium Term Moving averages – 167. – 173

    Intermediate Term Moving averages – 131 – 137

    On a medium term basis, the next support is that yellow line near the 90 area.  Gold stocks have now entered the fifth and final wave down.  Either the yellow line holds or a COMPLETE retracement back to where the bull market started in 2001 is going to occur.  For now, the potential to move to the 90 area remains as the most likely MEDIUM term scenario.  On a shorter term basis, a two week low should be forming between now and mid next week.

    HUI gold stock index price chart with support and resistance lines


    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1350 – 1429

    Medium Term Trend ~bearish – Moving Averages 1196-1203

    Gold is trying to from support at the 1080 price area and the 50% retracement of the entire bull market.  Odds favor gold will attempt a bounce here, but on a medium term basis, there is still no evidence that this will be the final low.  Not that it is out of the question, but its not the odds favored point. 

    Just the same, odds are high here that gold should hold the 1040-1080 area and at least try a rally attempt during August.   As long as we are below the dual yellow downtrend line, the medium term remains bearish.  


     Gold weekly price chart with support and resistance lines

     

    GOLD ETF GLD

    Moving Average Trend ~ 108.39 – 109.69 –bearish

    GLD is also trying to find support at the 105 area we have highlighted in the last few reports.  Resistance is the 106 area and then 108-111.  The short term trend remains down, but a short term bottom could be forming.

     Gold ETF GLD price chart with support and resistance lines

     

    GDX

    Intermediate term Trend   15.50 – 16.87 ~ Bearish

    Resistance is at 16.50-17.20

    GDX has broken the 2008 lows and until we reverse back above it the trends remain down. On a shorter term basis, price should bounce back and fill the gap and test the moving averages. 

    GDX gold stock ETF price chart with support and resistance lines  

    What next ?

    While the trends remain down in gold, we should be nearing a summer low in gold and the miners.  Odds are high that we should see a bounce into Mid August. We can still move lower into early next week, but overall a bounce to mid-August should be in the cards.

    Bottom Line

    It’s best to remain bearish overall but a bounce of some type can very well develop here. 

    We are getting pretty close to the end as metals and metal stocks are all in their 5th and final wave down of this bear market.  

    All trends remain down in gold, but a short term bounce here would not be a surprise.

     


  • 20 Jul 2015 10:54 PM | Bill Downey (Administrator)

    Gold Report ~ July 21 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 1172-1182 for higher TREND.
    Short Term ~Bearish– market remains in trouble for the downside

    Initial Resistance 1115-1122  2nd tier 1128-1133
    Support 1080-1090 2nd tier 1040-1150

    We have for a longt time advocated that no matter how much money they throw at the economies of the world, the debt level is too much and therefore it will most likely do what it has done in the past.  Crash from its own weight with a resulting outcome of DEBT DEFAULT.  And that my friends is NOT INFLATIONARY--it is the exact opposite.

    The more the governments try to confiscate, the worse its going to get.  We said a few years ago that Europe would most likely be the focal point from where the real liquidity crisis emerges and Greece and what the EU is doing has everything pretty much on schedule.   The real crisis begins sometime in the next 6 to 12 months.

    Meanwhile, gold is doing what it is supposed to.  TAKING everyone one out.

    The fact of the matter is that gold is not an inflationary hedge.  Gold is a head against a PANIC in confidence and a collapse of government. 

    When will things change?

    When the long term trend in interest rates turn, gold will have its final wave down to wipe out the final hands.  Once that is complete, gold will reverse higher with rates as the BULL MARKET for bonds is on its last leg.  ONCE THE GREEN channel line that has been intact on the chart below for 34 years becomes support ---------and not resistance, rates will quickly move to the upper white line.   Once that upper white line become support,  gold will join hands with rates and do just what it did from 1968 to 1980.  THEY BOTH WILL MOVE HIGHER.  The coming new bear market in bonds won’t be from economic recovery  but from economic panic. LOOK how close we are to a red flag as the green channel line of 34 years tries to contain price.  It may do so for a while longer, but once it become support rates will move up to the white line pretty quick.  Once the white line becomes support, its game over.  We have seen the 300 year low (England) and we will soon learn later this year or early next year that the FED HAS NO CONTROL OF THE GLOBAL LONG TERM interest rate. 

    Yes it can AFFECT rates buy when the BEAR MARKET RETURNS,  but the market is too big to control.  What to know why the fed has been threatening higher rates but not doing it?    ITS BECAUSE they are waiting for the chart below to confirm a trend change of higher rates.  THEN the Fed will raise rates and make believe this is all their doing.   In reality, when it comes to long term rates,  the FED is nothing more than trend followers.   PERIOD.

    10 year interest rates long term chart

    Gold

    The last update showed the long term channel line from 2005 had been broken and odds favored lower prices and the big drop today is really part of that technical action.  We leave the chart in from the last update below and added the action since last Thursday. Long term LEVERAGED players are getting wiped out.  So are those holding gold stocks, and silver has gone from 50 to under 15.  While we do have some support at 1080 and 1035-1040,  the real next major support is at the 1000 level.  It doesn’t mean we are going to reach it --- but really, on today’s low, it was only 80 dollars away.  Thus odds do favor that gold will most likely touch that long term line near 1000.  That’s the odds…………but not the ABSOLUTE.  In summary, today’s 50 dollar purge is long term technical people throwing in the towel. 


     Gold long term monthly chart since 2001 with channel lines

    On the very short term look for gold resistance at 1115-1120 on Tuesday and then 1128-1133 and 1140-1146.

    If gold can hold 1088-1090 on Tuesday it may be an indication that a short term bounce will develop.
     

    Gold hourly price chart

    Cycles

    Here’s what we said on the last update………..

    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. 

    We did not get any push whatsoever but we did get what the odds favored…lower and the call to remain bearish played out.  Even though futures dropped all the way to 1080 the spot low was 1087.  So today was certainly a candidate for a flush out day. 

    But what about now?

    Gold should have made a low today and potentially for July.  While the trend is still down, the high volume and the fact that the 1080 was a full 50% retracement of the entire bull market from 1999 to 2011, gives a high odds that gold should bounce back to the 1120-1145 area.  But it certainly doesn’t eliminate a move even lower.    So for now a bounce, but make no mistake----- if we don’t hold 1088-1090 (plus or minus a few bucks) it will remain vulnerable for lower again ---- this time towards the 1000 area.
     
    The bottom line, is right now is too early to call the bear market low,  but there are a lot of things to consider.  First off, Silver is holding above its prior low and today’s volume was just as high a when the December low took place as well as the November low. Even then gold struggled but it did eventually manage to provide the one and only rally over the last year from Nov to Jan 2015. However, as you can see above, gold gave it all back.

    Of even greater importance is the 1080 low is a full 50% retracement of the entire bull market from 1999 to 2011.  That is usually a significant support point in markets and while we cannot rule out lower because of the extreme weakness, odds do favor that gold should provide some type of support with at least a bounce back potential near this 1080 area.  The chart on the medium term section of this report shows the 50% retrace level.

    gold cycles


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


    The last update said that the long term crash line from 2008 had been broken (below 140) and the chart shows today’s tremendous drop in gold stocks was the acceleration of long term selling and margin calls.  We are now at 13 year lows.  Where does it all end?

    Well, the next support is that yellow line just under 100.  Gold stocks have now entered the fifth and final wave down.  Either the yellow line holds or a COMPLETE retracement back to where the bull market started in 2001 is going to occur.  As you know our indicators have been in bearish mode a long time. Can you imagine the balls the Gold GURU’s have by not once saying things were bearish and having called “the low” about 20 times.  One look at the chart says it all.  Everyone who listened to the “guru’s” have been wiped out. 

     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 1200.83 – 1205.22

    Our forecast has been that the chop in gold we were seeing was the precursor to gold breaking towards 1050-1100 and today we arrived right in the middle at 1080.

    Like the gold stocks, gold is decisively in its fifth and final wave.  As you can see we are reaching the white support line on the long term chart and the 50% retracement.  This is the first area where gold could bottom but we still feel that the odds are the TRIPLE red channel lines will be tested before its over. 

    The BULL/BEAR line is at 1172-1182 area.  We need a weekly and monthly close above those levels in order for the medium term trend to stabilize.

    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.  While this white line on the chart below can provide a bounce, gold most likely has more downside into the red lines.  What is the MAXIMUM DRAWDOWN gold can achieve?  The 680-720 level.  What is the ideal area then?  The 850-1050 level between Oct 2015 and June 2016. 

    Gold monthly chart full 50% retracement of bull market
     
    GOLD ETF GLD
    Moving Average Trend ~ 111.89 – 112.53 –bearish

    We have been saying if the 110 area doesn’t hold look for GLD to test 105.  We got there today.  As you can see on the very long term chart, this is the last support until around the 98 area.  Resistance is now 108-110 short term.

    Gold ETF GLD monthly chart
     
    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.
      

    GDX monthly price chart

    What next ?
    All trends in gold remain down and it is not out of the question to have a couple more days like today.  More likely is gold will get some type of bounce but its too early to call a bottom.  As we mentioned earlier, Silver did not make a new low, and the gold volume was huge and prices in this gold bear market reached the 50% retrace level.  That’s often where bear markets find support.

    However gold is not your ordinary market so we can’t hang a hot on this just yet.  The only people proclaiming a low here are the ones who have always been bullish and sell gold for a living.  Isn’t it fascinating that the gold market made those who SELL gold the Guru’s.

    WHY?

    Because once they jumped on the bandwagon in the early 2000’s they have remained bullish thru all of this for the simple reason that they sell gold for a living.

    Do yourself a favor.  STOP READING WEBSITES where people sell gold for a living and stop reading websites that make you feel better by having the same bullish opine that you have.  Those people are not guru’s ------ they are even lower than a used car salesman. 


    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 remain bearish overall but a bounce of some type can very well develop here.
    We are getting pretty close to the end as metals and metal stocks are all in their 5th and final wave down of this bear market. 

    All trends remain down in gold,  but a short term bounce here would not be a surprise.

     


  • 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.

  • 14 Jul 2015 10:19 AM | Bill Downey (Administrator)

    Gold Daily Report ~ July 14 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 1167-1179  2nd tier 1188-1198

    Support 1140-1150 2nd tier 1120-1130


    Gold Short Term

    Nothing much has yet changed in gold.  We still see that 1172 (1167-1177) is the main resistance to overcome on a short term basis.  We had targeted 1140-1150 as support and so far that has held since the July 7th low at 1145.  That is still support but a close below 1140 should be enough to send gold towards the 1050-1100 area.  


    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 blue cycle has been very weak and now we approach the next red cycle turn due July 16th (plus or minus 72 hours).   That means that if gold rallies into the end of this week, it has the potential to turn back down into the end of the month.


    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. 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 1000-1100.

     

    Gold Cycles


    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 – 149.89 - 152.22

    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.


    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 153 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.  

      

    Hui gold stock index price chart

     

    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 weekly price chart


    GOLD ETF GLD

    Moving Average Trend ~ 112.46– 112.84 – Neutral/bearish


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


    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 is 98-105 and near the 84 area (not on this chart)

    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.  

     

     Gold ETF GLD price chart

     

    GDX

    Intermediate term Trend   17.78 - 18.08 ~ Bearish

    Resistance is at 20.08 – 20.22


    The GDX long term chart is also displayed today.   As you can see, we have broken the long term green channel line.  Can price move lower than that ?   Yes, it can.  Because GDX is not a very old ETF there are no long term charts that exist.  The best representation is the HUI.   While this can very well be "the LOW" or near it, there is nothing impossible in price in commodity markets.  We need to get back above the moving averages on the short term for relief.  Watch that green channel line.  If we can’t get above that, then expect lower prices.

      

    Gold stock ETF GDX price chart


    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 continued closing below 1172 this week will keep the pressure on gold.



  • 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.  

  • 02 Jul 2015 9:52 AM | Bill Downey (Administrator)

    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 1160-1225

    Initial Resistance 1172-1182  2nd tier 1187-1192
    Support 1150-1162 2nd tier 1130-1140


    Gold Short Term
    A look at the very short term hourly chart suggest that gold may be making a short term bottom this morning.  It looks like a flushout under 1162 occurred and now gold is back above that area.  Overall, we need a close above 1172 and then the blue moving average must move above the green with price above both.   Platinum looks to already have bottomed and there is some divergence in MACD and a few other indicators suggesting a bounce may be ready to develop.   
     
     gold hourly price chart

    Cycles
    The next cycle is due July 1st (plus or minus 72 hours) and odds favor gold is putting in a low this morning where another attempt higher should occur.  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.  In summary, odds are high that gold begins a recovery attempt into mid July.
     

    gold cycles 


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


    On the downside we can 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.


    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.

     

    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

    Look at how the 1172-1182 area has held so far this year on yearly support.  The big question is however, is gold getting ready to break to the 1050-1100 area?  It is certainly possible.  If we close below 1162 and then 1140, odds will greatly increase that it will develop.  But at the moment, the market is in its worse chop we have seen for years.

    June is a pivotal month and we often see important price lows.  Just look at the last three years.  IF gold breaks lower here, odds would favor we’re heading towards 1050-1100.  However, a weekly close above 1225 and then 1255 would begin to favor a rally into July/August (which in itself is often a bearish move).

    If there is one PLACE to look for the BULL/BEAR line it’s this 1172-1182 area.  As long as price remains above that level, then an upside move can still take place.  Any weekly close below 1158-1163 favors lower. On the upside we need a weekly close above 1225 and then 1255 to get some action to the upside going.

    We stated during the rally from November to January that the bull market in gold can ONLY resume if we take out the dual triple green channel lines and make it support. Price reached the middle line at the triple green trend line and then turned back down and has not looked back since. And that’s really the bottom line. In order for the gold market to resume its bullish form gold absolutely must make the triple green channel line a price support point and not resistance.

    The one thing to note here is the medium term moving averages are at 1201-1209 and that is the area price resides in as we enter the final week of June. A move above the dual yellow lines would favor a rally to either 1300-1322 and as far as the triple green channel lines.  That is where a summer rally would most likely fail and lead to one final bottom between October 2015 and June 2016.
     
     

    GOLD ETF GLD
    Moving Average Trend ~ 113.28– 113.35 – Neutral/bearish

    GLD (like gold) is a trading nightmare at the moment of sideways erratic movement.   Until things give trending indication, its best to be patient.

    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 (not seen on the chart below) is 98-105 and near the 84 area.
     

    GDX
    Intermediate term Trend   18.43 – 18.66 ~ Bearish
    Resistance is at 20.08 – 20.22

    GDX is stuck in a long trading range between 17 and 23.
    Whenever that occurs for this length of time, its best to take the moving averages with a grain of salt.

    A retest of the green line---which is basically the 2008 crash low line can’t be eliminated.
     


     
    What next ?
    We have arrived at the mid point of the year. Interesting that COMEX in NY closed at 1172.
    Things are very quiet and not moving anywhere.  It will remain so probably until after the July 4th holiday.
    Odds favor gold makes a short term low in the next day or so.

    Bottom Line
    June often is a turning point but it can extend into July.  Evidence that gold should be bottoming short term is showing up as platinum and palladium seem to be making their lows as well.

  • 22 Jun 2015 7:49 PM | Bill Downey (Administrator)

    Gold Daily Report ~ June 23 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 ~Neutral/Bearish – caught in a sideways market 1160-1225

    Initial Resistance 1192-1198  2nd tier 1202-1209

    Support 1172-1182 2nd tier 1158-1164

    Our last update listed support at 1162-1172 and the low was 1182.  Resistance was listed at 1205-1212 and the high was 1201.

    One the upside, until we take out 1225 and 1255 we remain in a trade range. 

    Gold price drops below $1,200, focus on Greece

    New York (Jun 22) Gold was weaker Monday on Greece optimism.  Positive talks over the weekend sparked a wave of rising optimism regarding the EU-Greece debt renegotiation. However, the Eurogroup meeting held this afternoon yield nothing but the usual wishes of an eventual favorable outcome.

    The EU Leaders Summit is due later, and despite EU officials already argued against clinching a deal tonight, it seems the optimism of market participants remain intact, hurting the demand for the safe haven metal.

    Gold short term significant levels

    As of writing Gold is down to $1,185. A drop below $1,171.90 (low Jun.15) would open the door to $1,162.10 (low Jun.5). On the upside, the immediate resistance lines up at $1,209.00 (high May 25) followed by $1,215.30 (high May 22) and then $1,219.40 (high May 13).

    On the medium term, a gold low at the end of June/early July could produce a rally attempt.  This would be in line with the medium term cycle due on June 23rd – July 1st (plus or minus 2 weeks).  The short term cycle is due July 1st (plus or minus 72 hours).  

    Overall odds still favor one final low between Sept 2015 – June 2016. However, until we get a weekly close below 1162, a potential rally can develop in July/August first.

    US Dollar Ready to Turn to Haven or Feed on FOMC Rate View

    By John Kicklighter, Chief Currency Strategist

    Fundamental Forecast for Dollar:Neutral

    The FOMC’s own rate forecasts have projected 50 bps worth of hikes this year.

    USDollar has enjoyed a positive correlation to FX VIX, but its haven appeal is not fully appreciated.

    While there may be a lot of volatility for the Dollar moving forward, the medium-term fundamentals carry a positive slant whether general market conditions improve or deteriorate. If the US and global economies move to a more stable and productive state, there is little to throw the Fed off its hawkish bearing for monetary policy – a view that the market still seems to be discounting. If the clouds darken and the financial system starts to seize under the threat of a China-led speculative crush or a Greece-borne European crisis, the Dollar stands ready to accept haven flows. This is a unique position to be in and should keep traders focused.

    If the ‘status quo’ of market complacency continues through the forthcoming weeks, the general FX focus is likely to shift back to the theme that has commanded the market for the past year – relative interest rate expectations. Considerable advantage has been conferred to the Greenback for the unique hawkish bearing of the Federal Reserve, but the premium of being a first-mover towards higher yields is not likely fully priced in.

    In the short-term, the market is still pricing a significantly divergent view of the liftoff date for the first rate hike from what the central bank itself has projected. Further out, the pace of subsequent tightening (the curve) diverges even further. In the FOMC meeting this past week – which included updated forecasts and press conference – we found a few elements that spoke to the dovish. In particular, the fact that the vote to hold policy was unanimous suggests the most hawkish aren’t willing to start the ball rolling on the more difficult conversations at subsequent meetings.

    Yet, a uniform wait-and-see vote doesn’t offset the clearly hawkish views laid out in the forecasts. In the interest rate projections, the Committee is projected two, 25 basis point rate hikes before the end of the year. That is a significant contrast to Fed Fund futures which show the market is pricing in the first move out in January 2016. Given that there are only four more meetings this year and the Fed is unlikely to move back-to-back, the first hike would likely come latest in September if their views hold. Beyond that first move, the curve maintains a hearty premium to the market’s own view through 2016 and 2017.

    In the week ahead, the rate forecast will be messaged by the Fed’s favorite inflation gauge: the PCE deflator. It doesn’t need to present a dramatic reading, merely evidence that the slump in volatile components (energy and food) is rolling off.

    Rate forecasts will be the natural theme that we return to so long as something more dramatic doesn’t present itself going forward. And really, only one theme has proven itself capable of overriding: risk trends. Risk appetite remains buoyant, but conviction is all but absent. A resolution to Greece and/or stimulus from China to halt the Shanghai’s plunge are possible. However, the true risk is deleveraging finally starting. In that open shift towards safety, the Dollar would surge. -JK

    Bond Market

    The long term green channel line from the 1981 peak is being tested again.  With a Fibonacci 34 years complete, odds favor interest rates are going to begin to rise.  The FED makes believe it controls long term rates but they really don’t.  This is why they have been playing a cat and mouse game with raising rates.  Once they see the long term trend change, they will raise rates in an effort to make the market believe it is their doing.  Should the 10 year close above 2.8%, look for a sharp rise to 3.5% where the last long term white line resides.  This is the real bubble today and when it goes, its not going to be pretty because the rise will not be due to economic confidence, but to a LOSS OF IT.  Once that happens, gold should begin its rise again within 6 months of the new trend.  But before it does, it will most likely have one final low.

    10 Year T-Notes long term price chart 34 years

    Gold Short Term

    The US jobs report released on Friday was strong across the board and that most likely added to the gold pressure felt on Monday as participants keep going back and forth on whether a rate rise is in the cards for gold.

    On Tuesday resistance is 1192-1198 and the 1202-1209 area and then 1218-1228 weekly.  Look for support in the 1172-1182 area on Tuesday and then 1158-1164.

    A daily CLOSE BELOW 1162 will ADD A LOT OF WEIGHT OF BEARISH ACTION and the potential to move to new bear market lows in gold will increase substantially.  Until then we remain in a trade range.

    If we can hold the 1177 area, it’s possible to bounce back to 1200 this week.  But overall, until we close above 1208, its best to favor lower, especially with the short term cycle pointing down to the end of the month.


     Gold since the 2015 high price chart


    Cycles

    The next cycle is due July 1st(plus or minus 72 hours).  If the next short term cycle underway now plays out, then we should move lower to month end.  Keep in mind during sideways markets like this, odds of a cycle inversion are always much greater.

    We held 1162-1172 on a closing basis, and failed to make a new low and thus we remain trapped in a holding pattern of sideways action.  Any close below 1162 will favor lower prices.

    It’s not hard to see a head and shoulder (bearish pattern) and if we lose the 1140 area gold will probably be heading towards 1050 and before it’s all said and done in 2015 it will most likely trade under 1000 (even if only for a bit).  In summary, everything remains sideways at the moment as it has for the last 13 weeks.

    So far this week with the action on Monday, it looks like the red cycle is pointing lower to month end.

      Gold Cycles

    HUI

    Medium Term – Bearish

    Medium Term Moving averages – 173.06 - 179.84

    Intermediate Term Moving averages – 160-162

    Wage talks between South African bullion producers and unions started on Monday, with both sides far apart, setting the stage for protracted wrangling in the ailing industry.

    The talks, which involve AngloGold Ashanti, Sibanye Gold Harmony Gold and two smaller producers, come at a time when the sector is grappling with depressed prices, falling production and rising costs.

    “We need to place the viability and sustainability of our industry and the jobs it provides at the centre of our discussions,” Harmony chief executive Graham Briggs said.

    In labor’s corner stand four unions representing 94,000 miners. The two biggest, which are arch rivals, have submitted wage increase demands ranging from 80 percent to over 100 percent for the lowest-paid workers.

    Solidarity, a smaller union representing high-skilled workers, said it was seeking a 12 percent raise for its members, for the retirement age of 60 to move to 63 and for companies to increase their contribution to medical insurance to 60 percent.

    Investor jitters about the talks were underscored on Monday as Johannesburg’s Gold Mining Index dropped almost 5 percent. Bullion’s spot price also fell, slipping back below $1,200 an ounce, a critical level seen key to maintaining the profits of many marginal mines.

    In a departure from past practice, the talks are beginning with neutral chairpersons who will act as facilitators.

    Another departure is an industry proposal to offer labor an “economic and social compact” or a welfare package which it says is needed to keep the shafts profitable while providing for the welfare of miners.

    The Chamber of Mines said last week this would include proposals to share the gains of a rising gold price with workers while also sharing the pain of price declines. Proposals on housing, retirement benefits and employee debt will be included.

    But union leaders have publicly poured water on the initiative, saying they only want to talk money.

    The first round of talks will be held until Wednesday and will see the different parties presenting their positions. Three more days have been scheduled for next week.

    David Sipunzi, newly elected head of the National Union of Mineworkers, the biggest gold union representing over 50 percent of the sector’s miners, defended demands for wage hikes of 80 percent on Sunday, saying miners were still being paid “apartheid wages.”

    Labor militancy has been on the rise, spurred by perceptions that, two decades after apartheid’s demise, wages remain too low.

    But South Africa’s gold industry is in trouble. According to the Chamber of Mines, costs between 2008 and 2014 rose on average by over 20 percent per year. Production over the past decade has declined by almost 8 percent annually.

    Price Chart

    HUI price remains BEARISH below the medium term moving averages (173-179) and the intermediate averages at 160-162. That is where current resistance resides on the upside.  On the downside as long as we are below the white channel line in the 160-162 area we can 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.

    The bottom line analysis at the moment is gold stocks are bearish on all time frames at the moment.  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. 

      HUI gold stock index price 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 – 1209.22

    However June is a pivotal month and we often see important price lows.  Just look at the last three years.  IF gold breaks lower here, odds would favor we’re heading towards 1050-1100.  However, a weekly close above 1225 and then 1255 would begin to favor a rally into July/August (which in itself is often a bearish move).  

    If there is one PLACE to look for the BULL/BEAR line it’s this 1172-1192 area.  As long as price remains above that level, then an upside move can still take place.  Any weekly close below 1158-1163 favors lower. On the upside we need a weekly close above 1225 and then 1255 to get some action to the upside going. 

    We stated during the rally from November to January that the bull market in gold can ONLY resume if we take out the dual triple green channel lines and make it support. Price reached the middle line at the triple green trend line and then turned back down and has not looked back since. And that’s really the bottom line. In order for the gold market to resume its bullish form gold absolutely must make the triple green channel line a price support point and not resistance.  

    The one thing to note here is the medium term moving averages are at 1201-1209 and that is the area price resides in as we enter the final week of June. 

     Gold weekly price chart

    GOLD ETF GLD

    Moving Average Trend ~ 113.64– 113.65 – Neutral

    GLD (like gold) is a trading nightmare at the moment of sideways erratic movement.   Until things give trending indication, its best to be patient.  

    Resistance is 119-120 and support at 111-112 and that’s the range we keep trading in.  There is another line near 109.   Longer term support not seen on the chart below is 98-105 and near the 84 area.

     Gold ETF GLD price chart

    GDX

    Intermediate term Trend   19.03 – 19.18 ~ Bearish

    Resistance is at 20.08 – 20.22

    GDX is stuck in a long trading range between 17 and 23.

    Whenever that occurs for this length of time, its best to take the moving averages with a grain of salt.

    A retest of the green line---which is basically the 2008 crash low line can’t be eliminated.

     GDX gold stock ETF price chart

    What next?

    It looks like the short term bearish red cycle is in play with Monday’s drawdown.  The cycle is not due to bottom until month end.  Its possible that if 1177 holds on Tuesday we could get a bounce back to 1200 as gold retains its choppy pattern.

    Indeed, its “Chop around the clock” as we remain in massive congestion. 

    Bottom Line

    June often is a turning point but it can extend into July.  As long as we remain above 1162, there is still a potential for gold to mount a rally.

    While odds continue to favor this range to end, it has become a wait game.



Technical Analysis :: Gold & Silver

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