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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  • 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.


  • 01 Jun 2016 12:35 PM | Bill Downey (Administrator)

    Launch GoldTrends.net 

    June 1 2016   

    NOSTALGIA NOTE:   The Beatles "Sgt Pepper" album released 49 years ago today.

    What Is Holding Back GLD?

    Jun. 1, 2016 8:30 AM ET

    By Lior Cohen

    Rates and the Fed

    One of the major issues that has been holding back gold is the possible rate hike of the Fed. And after the release of the minutes of the last FOMC meeting the markets revised up the expectations of a possible rate hike in the near term, as indicated in the following chart.

     

    Source: Fed-watch

    As you can see, the chances of a June rate hike have picked up from close to zero to around 30%. And on Friday Chair Yellen pointed out that a rate hike is a possibility in the coming month. For GLD, higher cash rates are likely to translate to a rise in interest rates; and long term interest rates tend to bring down the price of GLD, as I have pointed out in the past.

    Despite the hawkish minutes of the last FOMC meeting and Yellen recent remarks, the market isn't ready and the FOMC didn't lay the groundwork for a hike as it did back in 2015 for the December rate hike. Bernanke once said: Monetary policy is 98% talk and 2% action; and up to the recent minutes, the FOMC didn't make it clear enough for the market that they could raise rates in June. But besides communications there is the matter of market conditions, and they aren't too favorable; if any, the U.S. economy hasn't improved by much as data show in the past couple of months: U.S. core inflation has actually come down in recent months -in case the core PCE, which the inflation indicator the Fed follows, is still well below the 2% target (in the last report the core PCE inched down to 1.6%) -- and the last NFP report showed a slower growth in jobs; the GDP for Q1 was also unimpressive - not only in terms of headline growth but also on investments. Therefore, the U.S. economy isn't better off now than it was a few months back. Finally, global economic conditions aren't much better: The Brexit still weighs on the markets and China's economy isn't out of the woods; for the Fed to raise rates right before the Brexit vote could be a poorly timed rate hike, if the British people decide the exit the EU --an event that will push up market volatility; and so far this year market volatility - one the issues that led the Fed to last year's rate hike from September to December - hasn't subsided by much.

    So why the Fed released hawkish minutes? It seems to be more a matter of bringing the market towards where the Fed is at. It also makes things simpler for the Fed to have the market convinced it aims to raise rates and then not follow through; as oppose to have the market cross off any possible rate hike in the near term.

    This week's upcoming NFP report could set the stage as to whether the Fed will be more incline to raise rates in July. Currently, the market expects a gain of around 163,000 jobs - not far off the growth in jobs recorded a month back - and wages to edge up by 0.2%, month over month. If the report comes short of market expectations on both growth in jobs and wages, this could be enough to bring back up the price of GLD (ON THE SHORT TERM / SPIKE), as was the case in the past.  

    And considering this report will come before the highly anticipated FOMC meeting, this report could have much stronger impact on the direction of GLD than in the past.

    But even if the report falls short of market expectations, which is likely to have a short term positive impact on GLD, going into the FOMC meeting on June 14-15, the gold market could still remain flat: Even though the June meeting isn't likely to result in a rate hike, the Fed could still set the groundwork for a July rate hike. And then if core inflation starts to pick up again, the labor market remains on solid ground, GB remains in the EU and market volatility slightly subsides, then the Fed will be more incline to raise rates by then. And higher interest rates are likely to keep curbing down the demand for gold.

    In conclusion…

    GLD could bounce back by the end of the week if the NFP report comes short of market expectations. But even if the report shows disappointing figures, the market will still expect for a hawkish statement by the Fed. Until the FOMC meeting on June 15th, it’s a battle between the USD and gold.

    Gold for remainder of the week by GoldTrends.

    Look for support in the 1205-1208 area and resistance near 1220.   If gold breaks below 1198 then 1172 becomes the target.  If gold holds 1205-1208 and rallies back above 1225, then higher prices to 1240-1255 would be the odds favored.   That area marked resistance is where gold needs to conquer.




  • 26 May 2016 10:28 AM | Bill Downey (Administrator)

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    May 26 2016

    Gold (weekly Basis)

    One of the things we’ve discussed on the website as to whether gold had re-entered a bull market would be its ability to move above the 2015 high at 1308 and then a weekly/monthly close above 1322. The 2016 rally stalled at 1304 and now a pullback all the way to the 1222 area has taken place. While gold could very well be setting up to take out that all important area, we must still be cautious. Those price levels remain the most significant resistance for 2Q 2016.

    With Dollar cycles potentially making a low in early-May - and the potential for global equities to accelerate lower into late-June - at least two potential deflationary factors could amplify this volatility into mid-2016 and create plenty of wild swings in Gold.

    On the weekly chart, gold has support in the 1172-1190 area and should gold close below the March/April lows of 1205-1209, then it is likely that gold will go test that lower band of support. Any close below 1214 will favor a test of the weekly support points. Until gold moves above 1308 and closes above 1322, the confirmation that a gold bull market has regained composure must still be in question. Until that time it is not out of the question that the metals have seen their spring highs and a volatile choppy and overlapping correction until August cannot be dismissed.


    Gold since the 2015 low

    The first important support at 1243 gave way this week and price has reached the 2nd support area for May at 1215-1222. On the downside, a break of 1214 would favor a drop to the 1205-1209 area and then 1172-1180. On the upside, look for strong resistance now at 1243-1253 and then 1272-1282. Any close below 1222 on Friday leaves the downside open to further price erosion.


    US Dollar

    The other issue we`ve discussed was the seasonal aspects of the US dollar and the usually strong showing the dollar produces in May. As we can see by the chart, that is what has happened so far. Now the dollar has reached resistance in the 95.20 area and this is one spot where we must look for a potential high. In the short-term, the Dollar Index could spike up to its monthly resistance with the extreme upside target for May - at 96.13. That is just below the 50% rebound level - at 96.29. If so, it could wait until next week to reach that level.


    Gold Cycles

    The window for the blue cycle has closed and the next red cycle is due June 4th (plus or minus 72 hours). The 2 key support points were the lower 2015 support line and the upper 2016 line. As you can see, price was unable to hold the 1240 area and now price has returned to the 2016 upper line where it barely held support on Wednesday. The big question now is whether gold will move higher into the June 4th cycle or whether we will get an inversion and move lower into that date. A close below 1205 will warn a cycle inversion is in play and lower prices will be favored. The other thing to watch now is whether gold can get back above 1243. That should be considered the key resistance point at the moment. A failure near the 1240 area on any rebound could keep gold under pressure. That`s the next area to watch. Any close below 1205-1214 is a warning that prices can continue lower.

    In summary, gold must hold 1205-1214 in order to get a push back up towards 1240-1250 and then we`ll see.



  • 18 May 2016 9:53 AM | Bill Downey (Administrator)

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    May 18 2016

    Fed minutes

    At 2:00 p.m. ET today the Federal Reserve will release the minutes of its April 26-27 meeting with investors watching for discussion on the balance of risks to the central bank's outlook. Two (non-voting) regional Fed bank presidents said yesterday that at least two interest-rate increases may be warranted this year. Jan Hatzius, the chief economist at Goldman Sachs Group Inc., is also warning that the market may have underpriced willingness to raise rates this year, as the spread between two- and 10-year U.S. Treasuries narrows to 92 basis points. The market-implied chances of a rate hike by the July meeting have increased from 15 percent to 28 percent in the last week alone.

    Dollar rises, commodities hit

    The U.S. dollar is climbing ahead of the Fed minutes, with a gauge of the currency hitting a seven-week high this morning. As the greenback rises, so commodities fall, with copper and other industrial metals declining. Gold for immediate delivery dropped 0.6 percent to $1,271.93 an ounce by 5:20 a.m. ET. Oil was unchanged at $48.32 a barrel.

    When we look at monthly closing prices, it is important to NOTE that the US Dollar closed out April right at the long term downtrend line. Since then we have bounced, but it should be clear that gold and the US Dollar are at KEY LEVELS (gold near upside breakout and dollar near downside failure). The big question is which one will win ?


    GOLD SHORT POSITIONS

    I have been hoping a pullback near 1240 would be the preferred track going into the 21st, but I'm beginning to have my reservations as gold looks to be picked up on every move lower that is attempted.

    This of course comes at a time when gold is heavily shorted by the commercials. Should they be wrong, gold could get the type of bounce on the above chart. If the control boyz win (again) then that changes the situation. As you can see below, they are VERY SHORT gold at the moment. They usually win, but NOT ALWAYS. Still, it beckons us to be careful.


    Gold Short Term

    Gold is closing in on its decision for the next price move. As you can see by the chart, the moving averages have converged along with price at 1275 and a triangle formation is taking place. Thus it looks like 1263-1267 is 1st support for today and 1275-1277 is resistance. Let's go look at the next chart and discuss the next two week outlook.


    Gold Cycles

    The window for a short term gold cycle low is due on May 21st (plus or minus 72 hours). Thus the window for a low begins today as we are within 72 hours of May 21st. The ideal range for a low is the 1240-1260 area. The 50 day average at 1251 and the 38% retrace at 1241 is the most likely places to watch. There is also some support near 1263 to watch. In any event, gold should be making a short term low in this timeframe.


    Cycle Projection

    While we are always aware that INVERSIONS can happen, and one hasn't happened since November, the chart below shows what the odds are gold will do if the current cycle plays out. The yellow zone is the future next two weeks. While there are no guarantees, the ODDS are high for gold to move higher in this fashion if the coming cycle plays out. As we can see, it's possible that gold can bottom early before the 21st, and that is a distinct potential. Don't look for this to play out exactly in this manner but keep note that another gold move higher could be on the horizon of beginning.


    So what is the Key ?

    We need a close above 1289 and really 1308 in order to favor higher towards 1322-1350. As long as we remain below the 1308 level (the 2015 high) then it is not out of the question for gold to have a cycle inversion. What would a cycle inversion look like ?

    It would look like the chart below. Just keep in mind that the odds are only 25% but we do have to be careful at this blue cycle. I will favor that gold is going to have a strong move, and I favor the upside, but beware it can go the other way as well.


    ANY CLOSE ABOVE 1289 and I'll have to favor that the gold low for this short term cycle is in place and I will do an update.

    SUMMARY - A good sized move should be arriving in gold. I'll favor the upside, but won't rule out a cycle inversion. Remember, the big boyz are very short. Be careful.

    I'll update again on Wednesday if price action warrants. THE CYCLE TURN WINDOW for blue opens tomorrow and lasts until Monday.



  • 17 May 2016 10:35 AM | Bill Downey (Administrator)

    Gold Long Term (Moving Averages – 1220-1275) Neutral

    Long Term Trend ~ long term trend has moved from Bearish to Neutral as price is above the lowest average on the monthly close. For long term trend to resume to bullish, the blue average will have to cross above the red. Remember this is not a timing tool but long term trend direction. The Long term trend moved to bullish in July of 2002 at $303 gold. It remained bullish until April 2013 when price collapsed below the Blue moving average in the 1480-1520 area. That put the trend to NEUTRAL. It then turned to bearish on Jan 31 2014 at 1239. It remained bearish until Feb 29, 2016 when the month closed above the blue moving average at 1235 putting the trend back to Neutral. And it is still a weak neutral. In other words price is near the threshold from bearish and neutral. But it is better than bearish. A close above 1322 will add a lot of strength to the “weak” neutral.

    At literally the same price point as the red moving average is the Fibonacci 38% retracement (that dotted line). Thus 1272 is a key pivot point where the bulls and bears are fighting it out for control.

    Finally is the 2015 yearly high at 1307. In order to label something a long term uptrend (unless we’re talking 20-40 years. But in order to label it long term uptrend, the minimum requirement is to exceed a previous year’s high. While we don’t use that component in our gauge, I’ve noted it because it is important resistance. The 2015 high was 1307, and this year’s high is 1303.

    The last component measures the 89 month moving average and that is the 1319-1322 resistance zone. That’s the last resistance before 1400. In summary, resistance is the 1294-1307 area and 1314-1322. Above that and we’re heading for 1400. On the downside, support is the 1222-1255 area and 1150-1172.

    The next key event that has to take place on the long term is for gold to get a monthly close above 1319-1322. This is the last long term resistance point on the chart until 1400-1438.

    A monthly close below 1222 raises a caution flag but overall, it takes (at the moment) a monthly close below 1122 for the long term trend to flip back to Bearish.


    Here’s another monthly view of the entire 21st Century Bull market.

    The key is getting above the 2015 yearly high at 1307 and attacking the 89 month resistance at 1319-1322 which is the Fibonacci 89 month moving blue average. Then the 2011 downtrend line at 1425-1450. These are the last two resistance areas until final Fibonacci resistance in the 1530-1550 area.

    In summary, the long term uptrend remains intact at the 21st Century trend line and the three final long term resistance points are defined below (1319-1322) (1425-1450) and 1530. Much higher prices are in store as we move towards 2018-2023.


  • 10 May 2016 4:29 PM | Bill Downey (Administrator)

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    Mid Week ~ May 10 2016

    Seasonally May is the strongest month for the USD.  Not every year, but enough for it to be the strongest overall month.  In addition, for gold, May is the 2nd weakest month of the year. 

    The chart below shows the US Dollar hitting 2015 price support and (so far) not closing below it.  It's the perfect time for a rebound rally in price and time and thus it should be respected. 

    IF THE US dollar came withing 1 point of violating the 2015 low and gold came within 3 dollars of taking out the 2015 high, then it stands to reason that a new low in US dollar and new high in gold would be a YEARLY event and thus would be another notch in confirming longer term reversals.  Gold KEY RESISTANCE IS 1314-1322.  A weekly close above 1322 would favor gold moving towards 1400.  On the other hand, a weekly close below 1217-1222 would delay this event (for now).


    This week

    Our post on twitter this morning was looking at potential support in the 1252-1257 area and since then a 10 dollar rally has been in place.  Should these lines break the next important place would be the 1240 area.  That is where we have the April 27th low before the final rally to 1300 and it is also the point of support from the 19th to 21st of April.    On a weekly basis the 1222 area is the critical support.  The odds of 1252-1257 or 1240 being the low this week are pretty good.  If gold is heading for 1222-1240 I strongly suspect that will be kept for next week.   

    Summary;  Look for 1240 or 1252-1257 as this weeks support (most likely point).  Lets go to resistance on the next chart.



    This week


    It looks like the mid-week bounce in gold is underway.  I've taken off the channel lines on this chart and to me it looks like gold is going to go test the resistance at 1272-1276 where the very short term moving averages are crossing.  A close above the moving averages, and the next resistance doesn't seem to be until near 1295 (last weeks high).  A close above the averages and we could say a move towards 1285-1295 can take place. 


    Summary very short term;

    Gold is still choppy and overlapping in overall pattern look.  If this is only a mid week bounce, then it should end Wednesday or Thursday.   Closes above the moving averages allow for further upside into Thursday.  


    Gold Short term cycles

    The next blue cycle is due May 21st (plus or minus 72 hours).  That means that a look at the chart suggests that the pullback is ON ODDS not complete.   That doesn't mean it can't explode higher at any time, it means all things given we should expect a low sometime next week.  The best spot for that is at the lower 2015 channel line or the red 2016 upper channel line.  That puts support in the 1210-1230 area and 1240-1255 (for now).  If the cycle plays out, a ideal low would be where the red and black trend lines meet on the cycle chart below sometime in the 2nd part of next week.  



    Summary

    A short term low is due next week.  

    Closes above 1272-1276 favor another attempt at pushing prices towards 1290-1300.

    Anytime we are below 1255, be on guard for potential testing of 1222-1240.

    If the short term cycle plays out, we should see a low point next week and a move higher into the 1st Week of June is the odds favored scenario at the moment.  

    2015 high was 1308 --- as long as we are below that, pullback can remain in play.  A close above 1322 on a weekly basis would be bullish signal for 1400 gold as next target.

    WATCH THE US DOLLAR -- odds favor gold reacts in opposite.  


  • 09 May 2016 1:50 PM | Bill Downey (Administrator)



    Gold Short term - bearish

    This week’s important price points in gold are the 1260-1263 area and then near 1255. Additional support is the 1222-1230 area. Gold should see a bounce from this Monday low back towards 1272-1280 and then we’ll see. IF the short term cycles play out, this pullback should last until around the 21st of this month. Resistance this week will be 1280-1290 if gold gets back above 1272.


    Gold Short term Cycle

    As discussed in our last update, a close above 1272 favored higher into May 6th with the target the upper dotted channel line and that’s what we got going into the cycle turn due May 6th (plus or minus 72 hours). If the cycle plays out, gold should move sideways to lower going into the next blue cycle due on the 21st of the month. The window for the red cycle turn is open until this coming Monday close. In summary, if the cycle plays out, we should see a pullback into and around the 21st of May.





Technical Analysis :: Gold & Silver

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