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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  • 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.



  • 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.



Technical Analysis :: Gold & Silver

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