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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  • 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.



  • 08 Aug 2016 10:01 AM | Bill Downey (Administrator)

    Overview

    The most likely place for gold to peak or undergo a 2016 correction is at the 2011 downtrend line on our weekly chart.  The bears have held the line now for 5 weeks.  Its a time to be cautious in gold.  A close above 1362 this week would change that idea short term.  Otherwise,  look for a test of 1305-1312 or the 1322-1332 area this week.  If short term cycles play out, gold should be making its monthly low near August 18th.  

    It looks like a lot of gold inventory is being brought in for anticipated futures buyers who will look to take delivery.  It's not the available category, but odds favor they will use it to settle contract deliveries.


    While a lot of inventory is being brought in, it's key to realize that the big boys are short.   They don't always win, but odds favor they try another push down over the next two weeks.  Even in bull markets, there are pullbacks where the big boyz cover shorts and then let the market run higher and then re-short.  Wash and rinse.


    Gold Long Term – Moving averages (1218-1252) neutral

    The 2011 downtrend line is the most important line for gold to overcome as it’s the last MAJOR downtrend line in the bear market. As long as gold is below this line the summer pullback can continue. There’s support in the 1250-1272 area and then 1222 on the medium term.

    The bottom line is gold must overcome this line in order to start the next leg up. Until then, the bears will most likely give their best effort here to get gold to sell off into a good correction. Thus we need to remain cautious until we get above the 1388-1400 area.


    US dollar ---Long Term (Bullish)

    The one thing that does concern me is the long term look of the US Dollar chart. Although the medium term has been sideways for a year and a half, the most likely scenario or we should say, the odds favor that the US dollar still has a final move up left in the rally that began in 2014. The key will be the 100-104 area. If the US Dollar gets above 104, look out.

    If it does happen, expect a major liquidity squeeze and panic. You see, in a liquidity squeeze, the only safe place is where the DEEPEST markets (VOLUME) exist. The US dollar wins that one hands down. That’s where the money would go to park. For now the US Dollar remains in a trading range. The message is we can’t rule out the upside potential of the US dollar. There are times when it is possible for both gold and the US dollar to rally. So this doesn’t eliminate the gold story, but we need to stay on top of what the US dollar does at these levels.


    Gold Short Term

    We got what we think was the peak last week on our cycle turn near 1360 and it looks like price is going to test 1322-1332 to start the week. If we lose 1320 then look for 1305-1312 next.

    In summary, odds favor that gold stays in corrective mode this week. It takes a close above 1362 to change the outlook. The 1346-1355 area should be strong resistance. Let’s zoom out a bit more.


    Here’s a view of key August support. It’s a bit different but it does highlight the 1305-1312 area also. If we lose that area, then 1250-1272 comes in play. Remember, on the longer term charts, we are at the 2011 downtrend line, and that is where the deepest correction in gold for 2016 is most likely to develop from.


    Gold Cycles

    The next cycle turn of August 2nd (plus or minus 72 hours) is complete and the window is closed. The next turn date is August 18th (plus or minus 72 hours).

    Gold has set a 1--2 month peak in the first 3--4 trading days of the month - in 2 of the last 3 & 3 of the last 5 months.  August looks like a repeat could be in play.l

    The bottom line is we expected a turn back down into the middle of August beginning last week. It is underway. While we never can eliminate a cycle inversion, odds favor gold weakness into the next cycle turn date. There’s support in the 1300-1312 area and then 1260-1272. Odds favor if we lose 1322, gold is heading for one of those two area’s.


    What about Silver?

    The medium term trend remains up. Goldtrends recommended a long term buy just once since 2011, and that was at 14.38 spot. Any pullbacks to 16-18 should be bought for long term appreciation.

    Medium term resistance remains 21.34-21.58 as previously listed. Support lies at 18.75 -19.20. Silver’s latest pullback reached 19.30 and had since bounced back to above the 20 area before the Friday selloff.

    While the trend remains up, we should be aware that the 21.34 resistance we are using is one we have often used on the long term. It is the 2008 high and is represented by the Green line we have had on our chart for a number of years. Look how important it is right now on the chart. That is where the Bull/Bear line currently resides for Silver. In other words, it’s the most likely place for a good sized silver pullback attempt. It takes a close above 21.34 to shift the longer term trend out

    In summary the trend remains up. The key is whether silver will exceed 21.34. As long as it doesn’t, it will remain below the 2008 price high and the potential to pullback to 18 could still come in play in 2016. The 18.75-19.20 is current support. Odds favor a short term top took place last week and a pullback to mid month is the odds favored outlook at the moment.




  • 21 Jul 2016 1:33 PM | Bill Downey (Administrator)



    The Future of Gold for New Investors

    With several significant events rocking the financial markets we look at the short and long term future of gold for new investors looking to enter the market. While the economic markets struggle to deal with the fallout of Brexit we’ll take a look at how the gold market reacted.

    In a previous blog post on Gold Trends we wrote before about the British European referendum saying that Brexit could give up the soft ground gold had been built upon. We went on to state that Brexit could “usher capital back to risky assets and out of gold.” On June 23 the United Kingdom voted to leave the European Union. How did the gold market react?

    The good news for new investors is that the price of gold rose. The Financial Post stated that it rose by as much as 7.8% on the Friday following the referendum reaching a high of US$1,362.60 per ounce. The reason for this is that gold is seen as a safe investment and with so much uncertain speculation on the financial market, investors rushed to safe havens. The Financial Post went on to explain that history indicates that gold usually performs well in moments of low interest rates and accommodative monetary policy.



    There are two different types of gold that can be invested in and buyers should be aware of the difference between gold coins and bars. Leading trade and market insight company FXCM states that gold coins have legal status in their country of origin while bars have no legal tender status. They also state gold coins attract investors seeking simple and tangible means to invest. This is due to the fact that investors physically own the coins. In comparison, owners do not physically retain the gold bars they invest in and it is on the speculation market that investment is made. This will make the investment more risky.

    Investors who are looking to invest in gold have several options. The Week recommends using reputable companies to store physical gold. One advantage of putting your gold in a company rather than keeping it yourself is safety and insurance. Investors looking to capitalize on a gold fund can hold the gold in their pension using a global investment and management company. As stated in the previous paragraph the investment can be more risky but unlike physical gold you will earn interest.


    As an investor in gold it is vital to pay attention to market predictions. So far we have looked at the short-term benefits of investing in gold due to the current financial situation. However in the long term some experts predict a fall in price. Market Watch advises that gold could spend the next 10- 15 years in “ investment purgatory” with investors spending years trying to define the trading balance.

    To many investors gold is a safe bet. If you are thinking of investing in gold be sure to know what type of gold you want to invest in and beware of the short term and long term benefits.

    =========


  • 11 Jul 2016 8:19 PM | Bill Downey (Administrator)

    Lets look at the current situation;

    Gold hasn't changed since last Wednesday. We had the PRE NFP drop to 1350 and then the POST NFP FLush 1 -- clear the stops on the downside, and Flush #2 clear the stops on the upside. Then we had a rally back to 1375 for good measure and a return to where we started on Monday. Thus nothing has changed from the NFP report as we enter Tuesday. So we do have a double top in the noted resistance we have been using 1372-1388, and that is a short term caution flag. A move above 1375 will favor a test of 1388 and that's the key number.


    IF we push out a bit we can see the entire rally. This channel line is resistance 1372-1388. There's one other at 1410-1422. From an Elliot Wave perspective it is possible we are completing wave 5 here, but be aware, it doesn't have to be here. But the channel line does need to be respected. The nearest strong support is 1299-1308 (also 1322). The key is the upper line. IF we close above 1388 then prices will move above 1400.

    IN summary, this is strong support that needs respect. It can be broken above 1388, but i think the odds favor sideways to lower for the short term cycle. Let's go to that chart.


    Gold Cycles

    Short term gold cycles inverted before Brexit and after. Double inversions are rare but the markets have become so jittery that it's to be expected. I've seen about 1/2 dozen inversions like this over the past decade. If gold can move sideways to lower into the BLUE CYCLE IT WILL BE BULLISH for gold. However if we exceed 1388 (the upper trend line) then favor higher to the 19th.


    Gold Medium Term

    Finally, gold is up against the 2011 downtrend line. This is the most important resistance in gold so a pullback from this area would not be a surprise. If gold breaks this line, then look for another strong leg up. Here too the 1388 area looks like a key point.


    Summary

    If the short term cycle is correct, then gold should be sideways to lower this week and then make a low next week. Above 1375-1388 means the cycle will move higher into the blue cycle.

    Brexit is not the CAUSE of all this in markets, but it is the SPARK THAT HAS LIT THE FUSE. Expect strong volatility in markets.

    Finally, short positions are at a record high. Their either about to really get stuffed, or win a short term victory. Let's wait and see if gold can continue lower into the blue cycle. If we get above 1375-1388 odds will favor higher to the next blue cycle.

  • 28 Jun 2016 12:41 PM | Bill Downey (Administrator)

    Gold Medium Term - BULLISH

    Moving Averages 1167-1192

    As long as price is above 1167-1192 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. A Monthly close below 1205 would favor a retest of the moving averages and the yellow trend line. On the upside, we need a monthly close above 1322 in order to favor a re-test of the upper yellow line of resistance near the 1375-1400 area. A monthly close above 1322 would also give us our first confirmation that the lows we targeted for Dec 2015 or March 2016 were indeed valid in our forecast as the "low" in gold. In order to say the bull market is back underway via momentum would be to see the triple green uptrend line exceeded in price and supported. That would favor a rally towards 1700.


    Another Gold medium term indicator we are seeing is gold holding below the 89 month moving average. Closing above 1322 on Thursday and Friday will favor a test of 1388 could be in the cards as it is the 2014 high.


  • 20 Jun 2016 1:55 PM | Bill Downey (Administrator)


    GOLD UPDATE 

    The uncertainty around the U.K. referendum should get markets moving this week. A U.K. vote to leave the European Union would be immediately disruptive to global financial markets, and the Euro will be hurt while Sterling and the US Dollar (and potentially gold, but not guarantees.

    In fact, turbulence and division in Europe would likely drive capital meaningfully into U.S. securities and treasuries, and importantly drive the dollar sharply higher. After perhaps an initial pop in gold on the unlikely event of Brexit, gold could give up the soft ground it built up upon.

    Odds favor that gold has begun a seasonal pullback. A close above 1322 would negate that scenario.

    Many are banking on uncertainty and chaos causing a stock market shakeup for America along with Europe, but I'm doubtful of the severity and duration of any such blow. The only thing limiting frightened EU area capital flows into U.S. investment might be our election uncertainty and concern about the policies and statements of some of the candidates still in play. But the Brexit vote is this coming week, and our presidential election is not until November. As a result, if the citizens of the U.K. decide to leave the EU, the dollar should see immediate and sharp benefit. Riskier American assets like stocks should see benefit, if not immediately, then not before too long after the storm. Strong relative dollar gains versus the British pound and the euro would price down gold in dollar terms. The passage of time would alleviate fear, and usher capital back to risky assets and out of gold. But what if the U.K. determines to remain in the EU?

    I believe if Brexit is voted down, the dollar and gold should each give up ground over the short-term.

    Gold and the 2016 rally

    Gold has had a great move so far in 2016 and last Thursday we reached the KEY PIVOT POINT IN GOLD (1308-1322). Gold surpassed the 2015 high at 1308 got as high as 1313. Enough selling came in to take gold down 30 dollars at one point. The key was gold did not close above 1308 or 1300 for that matter.

    WE NEED A WEEKLY MONTHLY CLOSE ABOVE 1322 in order to continue higher. Resistance will be strong from 1322-1340.

    Support is 1265-1272 and 1249-1255 and 1205-1222. A weekly close below 1205 would do technical damage to gold and open the door to 1150-1175. The intermediate term trend remain up but cycles need to be watched.   Odds favor perhaps another correction.  If we close above 1322 it will negate the pullback.   Other wise expect sideways to lower. 

    Lets go to the next chart.


    Cycles

    The next short term cycle is due June 20th (plus/minus 72 hour). Thus the window is open for a turn. That Thursday high might have been it. In addition we had a cycle inversion where gold has gone from making Red cycle highs to blue cycle highs. Gold does best when we make RED CYCLE HIGHS. Blue cycle highs warn of a pause in gold and a pullback is favored for July. When we have blue cycle highs, odds favor gold is in corrective mode so be watchful. Price can go up but it can turn on a dime. Hopefully we will get another inversion this summer when the summer is done.

    Finally the yellow line is where the intermediate term cycles take place. While there is no guarantee a high will be put in, we should favor it until 1322 is taken out. If cycles play out, odds favor the next two weeks should be sideways to lower (with occasional bounces).

    The next short term cycle is due Jul 11th (plus/minus 72 hours). Support is near 1220.



    Medium Term Gold

    On a medium term basis the trend rmains up. Support is 1150-1190. Resistance is 1322-1340. The triple green line is where the MOMENTUM line is for gold. Once gold closes monthly above that triple green line, look for gold to make a major move higher.


    Long Term

    Gold has completed 4 waves on the long term (or is completing the 4th one). Wave 5 lies ahead and it should be a big one.


    GOLD STOCKS

    The HUI gold index has completed the first wave of 5. Strong resistance lies from 250-180. Support is near 175. Gold stocks are usually weak during June and sometimes all summer. Thus it would be reasonable to expect a summer pullback. Any time gold bullion closes above 1322 on a monthly basis, then gold stocks should find another leg.


    Summary

    Odds favor a gold pullback takes place in July.

    Bottom line

    Any close above 1322 on a monthly basis, will more than likely be enougjh confirmation thjat our call for a major low in gold favored either Dec ember or March. Dec came in as the low.

    If there is a crisis like we had in 2008 ---- it still possible gold will go down but as you might know, once the crash took place and the bottom was found, gold almost TRIPLED going into 2011. I So if gold is dragged down initially, it will explode higher like in 2008.

    The chart below shows just how dangerous things have become.  The chart show how many times the dollar changes hand.   Right now spending is drying up and you can imaging what that is doing to tax revenues.  

    A debt collapse and global depression look straight  ahead.   Expect Civil unrest to explode,  and a major war as well.



  • 16 Jun 2016 11:11 AM | Bill Downey (Administrator)

    Gold Short Term (Bullish)

    Our last update indicated that if gold got thru 1272-1285 it would target 1303-1322. Today’s spot high at 1313 has gold at the center of that resistance zone. The 1313 area looks to have strong resistance today (Thursday) and might very well be where they cap it.

    With that said, it is not impossible for gold to move to the 1322-1340 area before a short term cycle peak comes into play. Short term support is 1286-1295 and then the 1263-1272 area. In summary, the short term trend remains bullish, but the potential for a short term peak is high at 1313-1322 or at 1340. One of those two points should be where the June high takes place.



  • 10 Jun 2016 12:00 PM | Bill Downey (Administrator)

    Gold Medium Term

    Moving Averages 1156-1176 (Bullish)

    The medium term remains bullish in gold with support at the moving averages and the dual yellow downtrend line in the 1150-1172 area. As long as price remains above that area the medium term remains bullish. Yearly resistance is the 1303-1322 area and that is the price points gold must overcome in order for the current rally to resume. That is the KEY PRICE POINT TO KEEP FOCUSED ON in order to favor the medium term price will keep rising. A weekly close below 1205 will favor price returns to test the dual yellow downtrend lines. A weekly close above 1322 will favor gold is heading towards 1400. Until then we remain in a trading range of 1200-1300 dollar gold.

    Another important aspect is the dotted line where the Fibonacci 38% resistance resides (Appx 1272). As you can see on the chart, this area has proved to be resistance to the current gold rally. Once gold clears that area, it will once again give potential for medium term gold to rally all the way up to the yellow downtrend line which is situated near the 1370 area.



Technical Analysis :: Gold & Silver

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