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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  • 18 Dec 2016 10:38 PM | Bill Downey (Administrator)

    Gold Cycles

    We discussed on our website Gold Report last week that the price move to the next cycle turn looked weak and that the potential for a cycle inversion (a low last week on the blue cycle) was a potential. We also said that a close below 1152 would favor a move towards 1122. Last week’s spot low in gold was 1122 !!!

    Our discussion was if gold made a low last week, it was possible that “THE CORRECTION” from July could be over. Gold made a low.

    The chart below shows what the situation looks like. We spent some time this weekend relooking at all of 2016. Blue cycle lows favor a bullish TREND. As you can see, gold rallied into August where it made a blue cycle inversion HIGH. Blue cycle highs favor a bearish TREND.


    Cycles Continued

    Now gold looks to have done another cycle inversion to a BLUE cycle low = Bullish.

    Thus its possible that gold is bottoming and completing the correction that began in July. Just because it’s a blue cycle low doesn’t mean gold can’t go under 1122. But it does mean the odds favor gold is going to stop going down and the end of the correction could be ending. As long as gold going forward continues to make blue cycle lows, the odds will favor higher. The next cycle turn is Dec 29th (plus or minus 72 hours). Odds favor gold should begin a bounce into year end. However, volume is going to be real light as we enter the week before Christmas. That means it is not out of the question for gold to continue lower again into another RED CYCLE low. A close below 1113 spot gold would favor it. THAT’s THE SPOT TO WATCH. If we close below there, odds will favor another drop into the 29th towards 1072-1083.

    If gold sells off again this week look for 1113-1122 as first support and 1072-1083.

    If gold has made a blue cycle low resistance this coming week will be 1144-1152 and 1162-1172 and gold should remain in this bounce into the 29th (plus or minus 72 hours). Then we’ll see if the pattern is bullish looking.

    Summary - We still can’t rule out a final low in January but odds favor gold is going to bounce into month’s end, and then we’ll see.


  • 01 Dec 2016 6:30 PM | Bill Downey (Administrator)

    Gold Cycles

    We favored gold to move higher to month end due to cycles. However we stated that any close below 1199 favored a cycle inversion/rotation. And cycles did inverted after the 1199 breach and they have rotated back to Red Cycle lows.

    Our long term experience is that blue cycle lows are bullish for price and red Cycle lows produce bounces, but lower prices overall. In other words, a bear trend. One of the FEW exceptions I’ve ever seen was the May 31st low of this year at 1199. There are odds in markets, but there are no absolutes.

    The chart below shows what the situation looks like. Odds favor gold makes a low between today and Monday from where a two week bounce should take place and then we’ll see. A close below 1152-1162 will favor a move to 1122 first.


    Cycles Continued

    The intermediate and medium term cycles are also looking for a turn point here. Last year’s low was about a month early on the Bradley Siderograph. Odds favor the intermediate term is getting ready to make a low between now and January.


    Sentiment

    Sentiment in gold is reaching an extreme point where a trend change attempt also seems close by.

    While not a MEASURE in itself of Sentiment, the Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an index. This gold indicator is flashing an extreme reading and is yet another indicator to watch. It needs to turn UP in order to add to the potential turn point arriving in gold.


    Intermediate term using ETF GLD

    Gold ETF GLD– Moving Averages 116-118 (Bearish)

    Our last update had the intermediate term in bearish mode and while at the 114 area, we stated any NEW LOW (this week) would lead to a test of the lower support line near the 112 area and gold could shed 50 dollars. That’s about what we’ve gotten in gold.

    As you can see by the chart, GLD has fallen below our latest support line and now needs a close back above it on Friday to not trigger yet another level lower. If gold closes below 1062

    Resistance is now at 116-118 and at the 121-122 area. Support is 112 ON FRIDAY CLOSE BASIS. A close below 110 in GLD and price would trace down to the 104-106.50 where that support line resides.


    Summary – The trend remains bearish (as it was the last update) but a short term low is due in cycles. ANY GOLD CLOSE BELOW 1062 could delay the cycle. What we want to see is a close back above that trend line at 113 that GLD just failed at. If that develops, then a bounce to the next resistance line at 115-116 will be favored for next week. Either way, odds favor it comes down to the NFP report on Friday morning as to whether GLD can hold and close back at the line we’ve highlighted at PIVOT.

    Gold Medium Term– Bullish

    Moving Averages 1287-1287 (NEUTRAL)

    Our last update went from medium term bullish to Neutral and since that trend change at around 1272, gold has tanked. Price remains in NEUTRAL mode but with the red moving average on the verge of crossing above blue on this weeks close means any CLOSE BELOW 1262 GOLD next week means the trend goes back to bearish and will target 1083-1129 as the next support.


    Summary – As we’ve said since July on our website and on Twitter---UNTIL GOLD CONQUERS the 2011 downtrend line, the medium term correction can continue even into year end and the BULL MARKET TURN from 2015 remains UNCONFIRMED. Its reality right now and we need to understand that its stronger evidence than just someone’s opinion.

    Medium term Cycle lows are favored in the November to January period, so we’re entering that time zone. Once this cycle low is in place, 2017 still looks higher for gold. From a medium term perspective, odds favor the LOW for this correction won’t be complete until we reach support lines in the 1083-1129. A Friday close below 1179-1180 (the 2013 low) and the doors to SUB $1000 becomes a potential.



  • 22 Nov 2016 10:23 AM | Bill Downey (Administrator)

    Launch GoldTrends.net    


    Gold for the week of Thanksgiving


    Key things for gold this week

    Thanksgiving is always a tricky week in which to trade because we have options expiration and a major USA holiday (Thanksgiving) to deal with.  In other words, the week can be heavily influenced by the control boyz.  

    That doesn't mean that gold always moves lower.  But it does mean the control boyz have a much easier time setting up the market in a manner that could be beneficial to them either immediately or down for the following week.  Volume dries up by Wednesday on the COMEX, and its closed Thursday for Thanksgiving.  

    While Friday is open, the majority of market participants (traders & speculators) are for the most part absent until the following Monday.  

    Since the majority of gold trading takes place in New York, that means volume is low and this is where the control boyz have much opportunity to either spike the market lower (or higher) or test support areas that is important to how they would like the market to set up.  

    There have been Thanksgiving holidays where we've seen 50 to 70 dollar moves and there have been some where the price barely budges.  

    Thus it's a week that should be taken in context and one that is an excellent week to not trade and go on holiday yourself.   I cannot emphasize in words how good it is to take breaks from watching and trading markets and Thanksgiving week gives us that opportunity.  One should take advantage of this and get away from the market for a few days if at all possible.  

    Now you might say,  what ?  Take a few days off and miss a potentially important opportunity?

    If you think that way you may be a lot more "addicted" to the market than you think.  And that can be dangerous.  

    If your a trader, rest assured that the market has always in the past (and will always in the future) give opportunities for trade set ups for those who are patient.  If your an investor, a buyer of physical gold, it shouldn't matter not watching the market for a couple of days.  Take advantage of this week to recharge your batteries as there are not many weeks we have this luxury.   All work and no play---makes Jack a dull boy. 

    For the week

    December gold options expire on Tuesday Nov 22nd.  There are about 7000 put options at the 1200 strike price that expire today (thanks to Evert P. for that info).  Thus we'll find out after today if 1200 is going to hold and just how much MOJO gold has left in it's bullish bag.

    In addition, minutes from November's FOMC meeting will be released on Wednesday during light holiday trading due to Thanksgiving. They never miss a beat.

    Today is the last real day of volume due to Thanksgiving holiday in USA.  Unless the control boyz have a raid planned, gold should be quiet and remain in the 1199-1230 area for the week.  If gold takes out 1195, look for a move to 1172-1182.    The chart below shows resistance is most likely in the 1222-1230 area this week and support 1195-1205.  If we look at last weeks action and price pattern, it was choppy and overlapping.  It tried to make the 89 hour moving average support but when it failed, gold plunged.  Now look at this week.  Same choppy and overlapping pattern and at the moment trying to hold the 89 hour moving average.  Its best to remain cautious before we get any bullish notions at the moment. 


    On a monthly basis, the 1222-1226 area is where the moving averages reside.  As long as price is below that level, extreme caution is recommended.   The last day of the month is when the moving averages come into play.  A close below them (BUT MORE IMPORTANTLY BELOW 1200) on the last day of the month will most likely favor a test of 1095-1122.

    Right now

    Gold tested 1201 on Monday.  The May 31st low is 1199.  This is currently the most important support for 2016.  The question is this---will the control boyz allow for this area to hold or will they carve out the final STOPS to set up a test of 1172-1182?  It's certainly their chance with the holiday and low volume scenario.  Let's discuss 1172-1182.

     

    There is one more area before 1095-1122 that is important.

    While the 1200-1220 area is certainly important so is 1180.  1180 is the 2013 low and if gold can't hold that area, then a move towards 1095-1122 will become the odds favored target in December. 


    If you're stacking physical gold the 1180 area would be a good place to add to your stack, but keeping in mind that it is not out of the question for gold to test 1095-1122.  

    In summary, gold remains under pressure, and we favor that the low from this correction will occur between November and January of this year.  From this coming low, prices should move higher in 2017.  


  • 17 Nov 2016 7:35 PM | Bill Downey (Administrator)

    Gold Long Term– Neutral;

    Moving averages (1223-1226)

    Even the long term chart is showing just how CRITICAL the 1180-1220 area (especially 1222) is for gold with BOTH Moving Averages and PRICE coming together AT THE SAME PLACE.

    If gold ON A MONTHLY CLOSE ONLY can keep closing above 1222 and the BULLISH Blue average moves above the BEARISH Red average, (only 3 dollars separation) then the long term trend will go from NEUTRAL TO BULLISH. UNTIL then Gold remains technically Neutral. A close below 1222 on the last Day of November will warn that 1122 will be tested.


    Gold Long Term (continued)

    The bottom line is gold must overcome the 2011 downtrend line in order to start the next leg up. Until then, the bears most likely gave their best effort here to get gold to sell off into a good correction and they have been successful. Now the next critical test, the moving averages are here.

    Another way of looking at it, is if this area can’t hold, the BULLS can’t say the bear market that began in gold is over. If they do say it, it is only opinion (and pride).


  • 08 Nov 2016 10:59 AM | Bill Downey (Administrator)

    Gold Election Day In USA

    08 Nov 2016 10:58 AM | Bill Downey
    It's D-Day (Decision Day) for USA.

    Here's how gold looks right now.

    Short term gold has support near 1277 (the 200 day average not shown on this chart).  However channel support is 1266-1272. If Trump starts jumping out ahead look for 1st resistance near 1290.   Additional resistance is the Hillary Gap from the Sunday night open at 1289-1308.  Additional resistance is the 1322 area.  A Trump win could be a Brexit moment.  If I knew that they couldn't rig the election, I'd be long gold because I think Trump is way ahead.  But if the Hillary wins,  then look for gold to drop to one of the support area's below on the chart.


    Spot Chart

    Looking at spot gold since the low has price still within the 2016 channel.  Support is the 200 day at 1279 (give or take a couple of bucks) and the downtrend line near 1266-1272.  Additional support is at 1260 and then at 1250 & 1211.   Resistance is t he 1308-1315 area and 1322-1325.  The potential for another gold Brexit type of move into next week can go either way depending on whether the USA election system gets rigged for Hillary, or whether the vote is so big for Trump that the control boyz have no choice but to give it to Trump. 



    Cycles

    The latest red cycle high is playing out and gold has reached the 200 day average.  On this chart,  it shows gold below the 2016 channel based on December Futures.   Regardless, any break below 1272 should lead towards 1255-1260.   A full break (and Hillary win) could send gold to 1210-1222.   The next cycle turn is due Nov 14th (plus or minus 72 hours).  I think its going to be an important turn for gold.  Without getting into details, I'd like to see a gold low at the blue cycle (as blue cycle lows are the bullish trend).   

    Summary -  with this election, I think its wise to stand aside on short term trades until the next blue cycle (next week) becomes evident.  


    Summary

    On a short term basis, its best to stand aside until the next blue cycle comes into play.  If Trump wins,  the blue cycle will most likely invert to a high point in the 1322-1372 area.  If Hillary wins,  then its 1210-1250 come into play.   Lets see what happens and then we can make some projections for gold.

    Bottom line -- gold needs to overcome the 2011 downtrend line two weeks in a row to consider a big move higher in gold.


  • 21 Oct 2016 10:48 AM | Bill Downey (Administrator)

    Launch GoldTrends.net 

    NEWSLETTER ~ Oct 21 2016

    'Real' Negative

    Oct. 21, 2016 

    by: Market Anthropology

    Recently gold has led pivots in equities by ~ 4 weeks, which (if recent history continues) points to a sharp decline in stocks headed into November. To show the relative congruence of the pattern, we broke them both out below with gold's series set 4 weeks ahead of the S&P 500 on the chart below.  Of course there are no absolutes in markets, only odds.   The message is to be cautious regarding stocks in November.  


    Longer term, we suspect the primary difference is that as gold has been trading out of a cyclical low late last year, equities have been distributing across a broad top. This dynamic is expressed below by the same study - just weighted through performance, which saw gold marginally under perform the S&P 500 headed into the end of 2015 and consistently outperform equities this year on the way out. From our perspective, this largely has been driven by the shift lower in real yields late last year that dis proportionally benefits assets like gold, with the next chapter largely dependent on how the Fed will handle what we suspect will be rising inflation data and how the market will receive their response with an economic expansion already quite long in the tooth. Hint, hint - difficult times ahead in many respects.


    With beginning signs that US inflation data set to potentially sharply over the coming months - greatly supported by favorable comparisons to last year's oil price decline, real yields are poised to challenge their respective lows from 2011. This week, we received the September CPI report that matched headline, but slightly missed core inflation expectations on a month-over-month basis. That said, distilling the data through real yields, maturities on the long end - as expressed by the 10-year real yield, are on the precipice of joining the intermediate and short end in going negative.


    In other words - not exactly a rosy outlook for those Johnny-come-lately safe haven Treasury "investors" who helped push long-term yields to historic lows this year, despite US inflation data that appeared to have turned the corner in the back half of 2015. Moreover, should real yields push even further negative - which they very well could (i.e. see late 1940's and 1970's), the swath of Treasury investors adversely impacted by negative real returns would swell appreciably.

    On the flip side of the coin is gold, which at times carries a strong inverse correlation with real yields and exhibits sharply positive returns in a negative real yield market environment.  Then the opportunity cost of holding a non-interest bearing asset like gold becomes highly attractive when underlying market psychology is often affected by a broader loss of confidence in monetary policy and/or creditors' future returns. 

    (end of article)

    Gold, Interest Rates, & Inflation and Deflation 

    By Bill Downey (www.GoldTrends.net)

    It's not quite as simple as the above article suggests.

    First off there is an inflationary crowd and there's a deflationary crowd out there.  

    The inflationary crowd and their expectations for gold had their bubble burst from 1980 to 1999 as they witnessed gold drop from 850 to 250 during a time which the money supply and the cost of living continued to rise in dramatic fashion.  Finally in 1999 and 2001, gold bottomed near 250 and gold finally caught a bid after 911 when governments and central bankers put into high gear a global reflationary policy to avoid a global recession/depression.   

    To resolve the conflict between both the inflationary and deflationary crowd,  let's put this in perspective.   

    The inflation that has been witnessed since 1980 has NOT BEEN A COMMODITY BASED INFLATIONARY PERIOD.  It has been caused by Government taxation, regulation (& cost associated) Gov't services, excise, and sheer size of employees and paper tape as far and deep from earth to the moon.  So yes, the cost of living continues to rise.   But as you can see below,  the price of commodities (along with gold) moved lower from 1980 to 1999 and quite frankly didn't bottom until 2001.  After 911 central bankers (with global government approval) attempted on more time to REFLATE THE GLOBE in a massive coordinated money printing orgy unseen in human history.  And commodities and gold and real estate (and everything else) exploded higher into 2008.   And then the bottom fell out and since then we have been in a massive deflationary spiral so acute that the commodity low of late 2015 actually touched prices going back to 1976. 


    This is what the deflationist crowd is focused on.  Had it not been for QE into infinity and now a 5000 year low in interest rates, the globe would have been swept out in a deflationary collapse not seen since Rome fell and brought forth the Dark Ages.  Yes folks, the Roman empire ended in a deflationary collapse resulting from the same thing we are going thru now.  

    And yes,  Government was responsible then and they are responsible now because the central bankers are just the ones supplying the heroin if you will (debt and fiat) allowed by governments.

    This is the reason that gold is not already at $5000 dollars per ounce.  We are in a deflationary commodity collapse.  Every single dollar being sucked out by global governments is ALL MONEY THAT NO LONGER IS ENTERING THE ECONOMY AND THAT IS CAUSING A MASSIVE DEFLATIONARY EVENT at a time when trillions are owed in debt.

    In simple terms,  there is less and less money available to be spent and baby boomers are retiring at the rate of 10,000 people per day.  

    Hopefully I have shed some light on the fundamental situation that is going on globally. 

    Summary

    Debt is so prevalent that it has become almost impossible to reflate.  The outcome of this will be a global debt default and collapse of our system of things.  And it is getting close.   

    Once interest rates begin their rise it will signal the collapse will enter the waterfall portion of the cycle and it is then that gold is going to explode higher because RATES are going to explode higher.  Not because of growth, but because of FEAR.

    We saw a demo of that when the US dollar went off the gold standard and the price of energy (oil) exploded higher.  Contrary to what you have been brainwashed in believing....that higher interest rates are bad for gold is not true when rates rise due to FEAR and not GROWTH. 

    And that is what is coming straight ahead.   The chart below of the gold bull market of the 70's speaks for itself.  Once confidence in the system is lost, Gold and Interest Rates join hands due to FEAR and NOT GROWTH.  

     


    Once rates begin to rise gold might drop some more initially,  but it will be a fake out and gold will give us one final opportunity to buy low.

    Here's what to look for that will signal the collapse;


    Here's what to look for in gold;



    Be alert, keep your eyes on the long term trend in the Gold and Interest Rate market.  They will signal when the waterfall event really gets going.

    And folks, the real battle for what's going on was and still is ENERGY.   The chances of avoiding war during 2017-2018 are not good.  The challenge for world dominance is coming to a head at the same time.  


    History suggests that Solomon was given not only the greatest wealth by God, but also the greatest wisdom.  When asked about the future of the world and its condition, he replied, 

    "There is nothing new that happens that hasn't happened.  There is nothing new under the Sun."   

    The stage is being set.  Be prepared.



  • 12 Oct 2016 9:29 AM | Bill Downey (Administrator)

    Gold Medium Term– NEUTRAL/Bullish

    Moving Averages 1254-1288 (Bullish)

    The close below 1272 last week has gold medium term in damage control. We are below the blue moving average and just barely held the red average on the Friday close (by 1 dollar). A weekly close below 1236-1242 sets up for 1172-1212 area.

    On the upside, we need a monthly close above the 2011 downtrend line of resistance at the 1344-1352 area. It has now been 14 weeks since the bull/bear battle of the line began. For now, they have been the victors.

    Clearing the 2011 yellow downtrend line would have been huge but as we suggested, the rally had gone as far as could without leaving the bear market channel.

    We continue (as we have since July) to favor a medium term pullback is in play as those are the odds. That Fibonacci 1272 area has been taken out and the moving averages are near the edge of giving way. If they do then the 1200 area (give or take 25 bucks) is the next area to watch. Overall, there isn’t LINE support under the moving averages until 1150-1172. Odds favor the medium term downtrend is not complete IF WE GET A WEEKLY CLOSE BELOW 1236-1242.



  • 03 Oct 2016 4:29 PM | Bill Downey (Administrator)

    a closer view of the long term gold support and resistance points

    Instead of using a 200 day or week moving average, we use a Fibonacci 233 week moving average. Look how the moving average and the 2011 downtrend line together make this the biggest resistance to gold moving forward. Additional long term resistance lies around the 1450 area of the upper black trend line. Support on the long term lies at the lower black channel line near 1220 and where the Fibonacci 89 week moving average resides as well.

    Gold must get above the 233 week moving average and the 2011 downtrend line in order for the next leg of a gold bull market to develop. Until then, gold is still vulnerable to move lower on this long term chart (zoom in). Two monthly closes above the 2014 gold high of 1388 would pretty much insure the next leg of the bull is underway.


  • 04 Sep 2016 7:15 PM | Bill Downey (Administrator)

    Gold Medium Term– BULLISH since Mar 11 2016 @ 1259

    Moving Averages 1217-1263 (Bullish)

    As long as price is above 1217-1263 the medium term remains bullish. The dual yellow line just under the averages is true support and we would have to break below those trend lines in order to go back to a medium term bearish outlook on gold. On the upside, we need a monthly close above the upper yellow line of resistance at the 1372-1388 area. It has now been 9 weeks since the bull/bear battle of the line began. So far, the bears have been able to hold it.

    Taking the 2011 downtrend line out would be a statement.

    The 2014 high is 1388 and there is resistance at -1422-1438 is we get above 1388. Clearing the 2011 yellow downtrend line would be huge and the rally has gone as far as it can without leaving the bear market channel.

    If the bulls get above the 2011 downtrend line they will have control. The most non arbitrary indicator that exists is the 2011 DOWNTREND LINE. If gold is above all downtrend lines, then gold can’t be in a bear MARKET. Do you see the triple green uptrend line just above the 2011 downtrend line. That’s the momentum line from the 2005 breakout. Once gold is back above that line, it will be in high gear. In summary, until we get above the 2011 downtrend line, a medium term correction remains in play. With that said, watch 1388. If we move above it, another good move up could develop to the triple green line. Until then, we continue (as we have since July) to favor a medium term pullback is in play as those are the odds. That Fibonacci 1272 area and the moving averages are the MEDIUM TERM first and 2nd points of support for this pullback if gold loses 1298.


  • 18 Aug 2016 11:05 AM | Bill Downey (Administrator)

    Gold Medium Term – BULLISH since Mar 11 2016 @ 1259

    Moving Averages 1198-1243 (Bullish)

    As long as price is above 1196-1242 the medium term remains bullish. The dual yellow line just under the averages is true support and we would have to break below those trend lines in order to go back to a medium term bearish outlook on gold. On the upside, we need a monthly close above the upper yellow line of resistance at the 1372-1388 area. It has now been 6 weeks since the bull/bear battle of the line began. So for the bears have been able to hold it-- But for how long?

    Taking the 2011 downtrend line out would be a statement.

    The 2014 high is 1388 and there is resistance at -1422-1438 is we get above 1388. Clearing the 2011 yellow downtrend line would be huge and the rally has gone as far as it can without leaving the bear market channel. Now we find out who’s in charge still. Trend remains up BUT CAUTIOUS HERE. If there’s to be a medium term correction, this is where the bears must try to regain control and so far they have done so these past few weeks. If the bulls get above the 2011 downtrend line they will have control. The most non arbitrary indicator that exists is the 2011 DOWNTREND LINE. If gold is above all downtrend lines, then gold can’t be in a bear MARKET. Do you see the triple green uptrend line just above the 2011 downtrend line. That’s the momentum line from the 2005 breakout. Once gold is back above that line, it will be in high gear. In summary, until we get above the 2011 downtrend line, a summer pullback potential is in play. With that said, watch 1388. If we move above it, another good move up could develop to the triple green line. Until then, we should favor a medium term pullback as those are the odds.

    ODDS FAVOR a 100 dollar move in GOLD is going to happen at some point in the next 30 days.




Technical Analysis :: Gold & Silver

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