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


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


    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)


    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)


    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 ?


    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)


    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.  


    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.

  • 28 Apr 2016 3:43 PM | Bill Downey (Administrator)

    Gold Long Term

    Long Term Trend ~ We’ve shown this chart before.

    The key is the action we saw at the 21st Century Channel line and the subsequent reversal higher. Odds continue to favor the major low has taken place. Long term support is that upper black dotted line at 1050-1087 area and then the lower dotted 21st Century uptrend line in the 850-1000 area. We’re right near resistance on the monthly chart at 1272-1294. The key is getting above the 2015 yearly high at 1307. Thus resistance is 1314-1322 at the Fibonacci 89 month moving blue average and the 2011 downtrend line at 1425-1450. These are the last resistance areas until final Fibonacci resistance in the 1530-1550 area.

    In summary, long term gold is getting very close to taking out major resistance points.

  • 27 Apr 2016 9:05 AM | Bill Downey (Administrator)

    This week all eyes are focused on Central Banks, namely the BOJ, RZB and time again for the Federal Reserve.

    The FOMC meets this week and results come out this afternoon, and although they promised 3-4 interest rate hikes in 2016, they have yet to pull the trigger. The central bank stated in March, that they are focused on events in other markets, particularly in Europe and Asia. Although data is supportive of another interest rate increase in the U.S., concerns about contagion from weak economies have caused the Fed to shift to a policy of "gradualism". This dovish stance on the market has allowed precious metal prices to rise.

    While market consensus points to no change in U.S. interest rate policy this week, central banks like to keep markets guessing when it comes to the actual meeting results. Therefore, precious metals face their next hurdle this week. A surprise rate hike would cause a rally in the dollar. A stronger dollar and increasing interest rates would likely be bearish for the precious metals sector on the short term, but certainly not the long term. We are in the camp that higher rates will be bullish for gold. Additionally, hawkish language in the statement increasing the chances of a rate hike before summer could cause a relief rally in the dollar and a downside correction in precious metals. With that said, all other trends besides short term seem poised for higher prices.

    Precious metals are likely to soar on the wings of a dove or fall if attacked by a hawk when it comes to the Fed policy and statements this coming week. Be careful out there in the precious metals markets, although they are looking better than they have in years, the prospects for volatility have increased with prices and we could see some violent price action ahead. I remain bullish on the precious metals sector, but it is likely to be a bumpy road up the mountain. Precious metals have all taken a giant step forward, the Fed and dollar will tell us this week if new highs are in the cards soon.


    On a short term basis, the big question is whether cycles are inverting and putting the blue cycle as a high rotation or not? The first chart shows the blue cycle high potential. If this is the right rotation then prices should begin to head lower today/tomorrow. In order to negate the cycle we would need to exceed last week’s high which is at 1272. Let’s go look at the next chart.

    Cycle with no inversion

    Because prices dropped to the lows during last Friday and remain above the 50 day moving average, it is not out of the question that the blue cycle remains at the low point. Any MOVE BELOW 1217-1222 will confirm we are going to move lower into the May 7th timeframe. The bottom line is that cycles are reflecting the markets indecision and choppy pattern. From a pattern perspective, a case can be made that gold is currently in an A-B-C corrective pattern, and that the C wave portion is going to play out. That would target the 1172-1192 area if that pattern observation is correct.

    In summary, gold remains in a trading range. Odds favor that it should make its move one way or the other after the FOMC meeting today.

  • 21 Apr 2016 1:44 PM | Bill Downey (Administrator)

    The one thing i didn't want to see was a NEW high at the blue cycle.  Now the question is has gold just INVERTED and changed the rotation to BLUE CYCLE HIGHS (bearish).   If yes, then odds are high that gold has just put in the spring high.   

    Although we can't be sure just yet,  the COMMERCIALS are heavily short gold and long the USD dollar.   
    If silver can't close above 17.25 on Friday, it will add more danger to the longs.   With silver making new highs this year along with Platinum and GOLD NOT DOING SO leaves the door open for the downside.  

    I'll have a full update tomorrow on the website.   

  • 12 Apr 2016 8:55 AM | Bill Downey (Administrator)

    Gold Medium Term

    Medium Term Trend ~ BULLISH

    Moving Averages 1128-1145 --- bullish

    As reported in February, the most significant event was the medium term trend had moved from bearish to neutral for the first time since April 5th 2013 at a time when gold closed the week at 1575. We reported that the next thing we need to see is the moving average blue cross the red average with price above both on a monthly closing basis. WHILE THE MONTH HAS NOT ENDED, THE BLUE AVERAGE (1128) CROSSED ABOVE THE RED (1145) two weeks for the first time since March 22nd , 2013 when gold was 1609 an ounce !!!!

    As long as gold closes above the blue moving average in April, the medium trend will remain BULLISH.

    The next step is to close above 1288-1322 on a weekly basis. If that develops look for gold to run up to 1400 at some point in time in 2016 with the potential for a lot more. In summary, this is the best evidence we have seen that the bull market has resumed.

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