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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  • 29 Oct 2015 10:58 AM | Bill Downey (Administrator)

     

    Gold Report ~ Oct 29 2015

    Trend

    Long Term ~ Bearish- Need a monthly close above 1800 to confirm the bull market final phase underway. Need a monthly close above 1560 to neutralize the trend.

    Medium Term ~ Bearish- Need a monthly close above 1255 to remove bearish trend.

    Intermediate Term ~ Bullish– Need close above 1188 for bullish TREND to continue. Goes to NEUTRAL if Gold ETF GLD closes below 109.  Very close to going neutral. 

    Short Term ~Neutral- Need a close below 1152 to flip short term bearish.

    Initial Resistance 1164-1172 2nd tier 1180-1188

    Support 1147-1151 2nd tier 1136-1141

    "Hawkish" FOMC Statement Confirms "Moderate" Domestic Growth, No Longer Focused "Abroad"

    With a 4% probability, it is no surprise that The Fed did not raise rates. Since The FOMC "folded" in September blaming global turmoil, stocks, bonds, and precious metals have soared as China (and EM) chaos has calmed while domestic data has declined. This has led to 'lift-off' expectations extending to April 2016, and so the question today is - how will The Fed convince the world it 'will' raise rates when it really can't...

    • *FED REMOVES LINE THAT GLOBAL DEVELOPMENTS MAY RESTRAIN GROWTH
    • *FED SAYS U.S. ECONOMY `HAS BEEN EXPANDING AT A MODERATE PACE'

    A definite hawkish bias but so we are left data-dependent (fundamentals bad, stocks good), and less economically optimistic, but are supposed to believe that December (34%) is still a live meeting (because of some hockey-stick expectation in data) because The Fed needs to raise to show that it can.

    For the past 7 years, Fed policies have been on "emergency" conditions.

    The economy moved off that condition years ago, but they've kept these policies in place.

    Why? It's due to pressure from Wall Street and the financial industry since the policies have led to stock market gains and easy terms to finance stock buybacks and M&A activity.

    The Fed this day changed its language, dropping worries about global economic conditions that may negatively affect the U.S. economy. That is considered "hawkish," meaning now they're free to raise interest rates sooner. But Wall Street wasn't buying it, as stocks rallied post the announcement.

    Nevertheless, after all this time, the Fed is still finding it difficult to normalize monetary policies. Bulls love and feast on their indecision.

    U.S. stocks rallied sharply after an early bout ("the first move's the wrong move") of selling.

    On the other hand, overseas markets, especially emerging markets, still experienced selling, as did currency markets and precious metals due to a rise in the dollar. And as stocks rallied, bond markets witnessed modest selling.

    The Fed didn’t have to raise rates because everyone else is lowering them

    Last week, the ECB President Mario Draghi said that interest rates would move lower in December, descending further into negative territory. Economic weakness across Europe will likely cause the ECB to continue the policy of quantitative easing far beyond September 2016 in an attempt to stimulate the fledgling economy.

    And while USA is lifting the debt ceiling, China is once again cutting interest rates as the global economic landscape is turning down hard with just about everything we look at.

    Last Friday, the Chinese central bank cut interest rates for the sixth time in 2015. Dovish central banks around the world are responding aggressively to deflationary data and signals in the global economic landscape. This lowers the chances that the U.S. Fed will raise rates as promised in 2015.

    Let’s look at the CYCLES chart first today.

    Since the pullback gold’s pattern has been a bull flag. The upper and lower lines define the range. In this type of pattern, odds favor a resumption of the uptrend once price breaks above or below the lines. Additional confirmation occurs when the close is beyond the line boundaries. When gold broke above the red 200 day average and ran above the previous high of the last 6 days with a 15 dollar rally to 1182, it looked like gold was going to run away to the upside as it did on October 2nd. But it was a bear trap. Price reversed and moved down 30 dollars to 1150. It’s still possible that the flag pattern will hold. However, if we break 1147 look for a move down to 1133-1141 next. This current cycle turn window is open until Monday so its not out of the question to move lower. The question really is whether we are making a blue cycle low? Let’s look at the next chart.


    Cycles Continued 

    Because of the big move up and down yesterday, it is possible that what we really saw was a top in gold. The chart below shows that it is not out of the question for yesterday to have been the peak in the cycle and for it to resume its downtrend for another two weeks. We won’t know for sure until next week which cycle placement is the correct one.

     

    Gold short term

    For a while on Wednesday it looked like the 1st target of 1155-1158 had held and we were heading higher. But a 30 dollar intra day reversal squelched that. We are now arriving at the 2nd target of 1146-1152. Thus if gold is really turning back up for two weeks, this is where it should bottom. However we can’t rule out a move to the 1133 area just yet. Resistance now will be the 1168-1172 area and then 1180-1188. Gold will try and hold 1147-1151 on Thursday. If it can’t then the 50 day average at 1141 (NOT SHOWN ON THIS CHART) will become support. On Friday the 1133-1136 area will become support if we can’t hold the 50 day. In summary, we expect 1147-1151 to hold on Thursday and if we keep going lower on Friday then 1133-1141 should be the low for this week.


    HUI

    Medium Term – Bearish – but nearing neutral.

    Medium Term Moving averages – 144 – 156

    Intermediate Term Moving averages – 131.75 -128.11—Bullish (4 weeks and since about 113 on HUI)

    A few updates ago we favored the gold stocks finding resistance at the solid 2008 Crash Low Line and discussed that the most likely course would be a pullback attempt potentially to the moving averages where first support would be encountered and would present potentially a buy point for a trade. The moving averages currently stand at the 128 (red) up to 132 (blue). (scroll under chart for more commentary)

    The low on Wednesday was the red moving average and the price did close below the blue. Thus the intermediate bullish trend is close to going out of bull and into Neutral. Neutral is not bearish but it’s a caution. The next support if the moving averages fail is the line from a GAP down in price that was formed on July 20th when the gold stocks accelerated to the downside after it had broken below the 2008 crash line low and the September high near 121.

    Prices traded sideways beginning on August 5th. Towards the middle to end of August we discussed that the trend was still down but in order to continue the trend lower we needed a close below 103. On September 11th, gold stocks made a new bear market low some 40 days after gold made its summer low in late July. The closing price that day was 103.10---just 10 cents from where the next reversal point was located on the gold stocks. From Sept 11th to October 1st, gold continued in its sideways chop but never closed below 103. October 2nd was the NFP (non farm payroll day) and gold stocks took off higher with gold. At that time we stated a move above 123 would favor a test of the solid white 2008 crash line near 140 from which a pullback would be favored. On October 14th, 15th and 16th, the HUI tested the 139 area and a pullback has been in play since then. Today’s pop was right back to the crash line and it reversed and closed at the moving averages.

    On a short term basis it is difficult to ascertain whether we made a cycle high and are ready to move lower into mid November, or if the gold stocks will make their low this week and propel higher.

    On a medium and long term basis nothing has changed yet as the HUI MUST GET ABOVE THE 2008 crash line (both solid and dotted 140-150) and make that support. Then it must conquer the 2015 downtrend line (both dotted and solid yellow) and give TWO MONTHLY CLOSES ABOVE that line in order to take the medium term trend OUT OF BEARISH mode and move it to NEUTRAL.

    Why two monthly closes ?

    It just so happens that the medium term moving averages (not shown on the above chart) are near the 160 area in the HUI which is basically where that solid yellow downtrend line resides. Two monthly closes above the moving averages takes us out of bearish mode to neutral and once the blue moving average closes above the red average along with price, the medium term trend will turn bullish and odds will favor the low in gold stocks is in place. There has not been 2 consecutive closes above the averages since MARCH of 2012. Both April and May of that year finished lower and that was when the HUI gold stocks gave their first medium term sell signal.

    On the medium we have more work to do before the trend moves out of bearish mode to neutral. That doesn’t mean the low is not in……….it means we need more evidence for a longer term signal.

    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1279 – 1372

    Medium Term Trend ~bearish – (note prices are ATTEMPTING TO OVERCOME THE MOVNG AVERAGES. A close above 1222 at end of the month brings trend from BEARISH to NEUTRAL.

    Moving Averages 1162-1177

    This commentary on the medium term below has been running since we reached the lows in July-August;

    Gold continues supporting at the 1080 price area and the 50% retracement of the entire bull market. Support remains that white line we bounced off on the lows and the three red lines under price. Until we crack below that level it is possible for gold to continue its quest higher at the moment. On a weekly basis, the 1172-1188 area is the resistance zone with 1211-1225 and 1258 as key reversal points. The dual yellow downtrend line is also key. As long as we are below that area, the downtrend on a medium term is still intact for now. On the downside, any weekly close below 1072 suggests the downtrend has resumed. Until then, it’s possible for gold to continue higher.

    New Commentary

    As you can see by the chart, the most significant event is that this rally peak was up against the dual yellow downtrend line established at the April 2013 crash line and the medium term moving averages (Blue Bull 1162 and Red Bear 1177. The Red bearish average (1177) is still above the Blue bullish average (1162). The TRUE trend reversal comes when we get the BLUE average above the Red. Look how long the Red average has been above the blue. (Note; the Red average IS NOT a 13 week average of WEEKLY PRICE CLOSINGS!!!) When the BLUE average is above the red, its bullish.

    We have been calling for a low to develop in gold between Oct 2015 and June 2016. We are now in the window to turn the trend. Now price has to perform in order to complete the bottom. Until we get two monthly closes above the moving averages and that dual yellow downtrend line, we still think there is a chance of one MORE LOW. Finally, keep in mind as we said, gold has retraced 50% of the rally from 1999-2001. That is the same retracement we saw at the 1975 low in gold.

    GOLD ETF GLD

    Intermediate term Trend (Neutral)

    Moving Averages 111.60-110.98

    Today’s reversal lower ended 20 cents below the red moving average and it becomes while the gold stock intermediate term trend remained bullish by a hair, GLD went to Neutral by a hair. Because it was an FOMC day, we should view it with a grain of salt. A close below today’s low would definitely have the trend out of bullish to neutral. Support is that horizontal white line near 109. We’ll need a close above today’s high to re-instate the bullish trend.

    Normally we would expect the moving averages to hold and provide a bottom but the one thing to be careful of is FOMC weeks can be very unreliable.

    If GLD starts moving higher the key resistance will be today’s high and then that uptrend line near 114.50 In summary, today was a FOMC clear the stops on both sides day for gold. Lets see what the last two days of the week bring.

    GDX

    Intermediate term Trend moving averages 16.11-15.76 –Bullish (but only by a hair).

    On our last update we discussed intermediate term had turned bullish and the next resistance was that green channel line near 16.40. We have now reached that level twice and now we’re at the moving averages. If we lose the averages, then 14.50 will become the next short term support point. If we break above the white and green 2008 crash line, then we should see 18 as the next target.

    This pullback to the moving averages is usually a buy opportunity but the reversal on Wednesday could be signaling lower. Any position taken here for a trade should run a tight stop. The bottom line with GDX is we must get above the 2008 green line and then the green line just under 18.00. If we can do that then 20.50 to 23.00 becomes the target. The two green lines are the resistance for this ETF.

    What next?

    Gold held our closing support into Wednesday, and the pop up after the FOMC meeting got above the bullish flag on the daily chart but it was a bear trap and price reversed in a 30 dollar selloff that brought price back to the bottom of the flag pattern. The pattern is not invalid yet as it needs to close below the lower flag line. A close below 1146 will favor a test of the 50 day average in a range of 1136-1141. Monthly and lower channel support is 1118-1122.

    Today’s scenario really loused up things as its possible we saw the high for the blue cycle and we move lower. However, The cycle turn (Oct 27th – plus or minus 72 hours) could still be moving lower and once again inverting the rotation to a blue cycle low. We’re not going to know for sure until next week. The other thing to keep in mind is that this week is a Martin Armstrong Panic Cycle week. We saw that today with a 15 dollar rally higher and then a 30 dollar move lower. It is still not out of the question to reverse again as the BULL FLAG on the chart below has not yet been broken.

    Bottom Line

    Same as we have said since September;

    The low in gold is approaching and its not out of the question that we saw it at 1072 in July. But the oods are not good enough for us to proclaim it yet. If things work out we can have one final low that takes place between now and June 2016. But the 50% total retracement that took place when we hit 1080 in gold has satisfied the bear market requirement and like we said ----its not out of the question that we’ve seen it. Lets give it a bit more. When gold closes monthly above 1222 and 1258 the odds will greatly increase that the low is in.

     

     

  • 26 Oct 2015 10:49 PM | Bill Downey (Administrator)

    The FOMC meeting begins Tuesday morning ends Wednesday afternoon.  It will most likely be the most important item of the week for Gold and could set the pace for the next two weeks and even to year end.

    There are two targets for an ideal low for this week on the chart (1155-1158 or 1146-1152).  Also we have weekly support at 1130-1136 and Monthly support at 1118-1122.  As you will read in the cycles section,  this week has the potential for a big move in total dollars and thus is it not out of the question to reach those levels.  Lets go to a quick cycle update.  Scroll down. 



    CYCLES

    We are now in the cycle window for a turn that is due (Oct 27th - plus or minus 72 hours).  We are at a Fibonacci 13 weeks from the gold low and for those that follow Martin Armstrong,  this week is a PANIC CYCLE week.  That means that the odds for a BIG MOVE are much greater than normal.  Not every panic cycle week produces a big moves, but they happen often.  And not always in the same direction.  In other words, it could be a sharp move down into FOMC with a sharp move up to follow.   One final note,  the window for this cycle turn could extend to as late as November 2nd.  

    Also, the sharp 2000 point sell off in the US stock market over the last 4 days of the August drop caused havoc with the short term cycles as a late arrival occurred on the Red cycle that was due August 14th (plus or minus 72 hours) to only occur on August 24th (the day of the stock market sell off low.  Then the following blue cycle failed just 4 days into it causing a cycle inversion where the ROTATION changed to a RED CYCLE LOW.  The next red cycle low came in early on October 2nd when the NFP (non-farm payroll report) was a disaster and gold jumped from 1106 to 1122 in a few minutes and all the way to 1140 within an hour of the report.  Now the FOMC MEETING this week looks like it is causing GOLD to return to a BLUE CYCLE LOW rotation as it inverts again.  Those who have been with us for a long time know that it is rare that the cycles get shifted this much as the turns most often occur within the cycle window.  The good news is that shifting back to a blue cycle low is what we want because that is the rotation that is associated with bull moves in gold.  Once the BULL MARKET IN GOLD returns,  we will see prolonged periods where the rotation will remain Blue cycle lows and red cycle highs.  



      Odds are favoring that gold is going to bottom this week and then move higher to mid-November.   While we are not ready to pronounce the Bear market is over, it is important to keep in mind that the ideal time for a change to bullish in gold on the longer cycles has been Oct 2015 - June 2016 and we are now in the window for that change.



  • 14 Oct 2015 10:21 AM | Bill Downey (Administrator)

    Gold short term

    Gold has moved higher to the next resistance level of 1172-1188 but has yet to close above 1172. The Tuesday pullback to 1152 was thwarted convincingly and price has move back to resistance. A close above 1172 and then 1188 would warn of 1211-1222 as the next target.

    Support is 1152-1158 and 1136-1142.


    Cycles

    The next cycle turn is due now Oct 12th (plus or minus 72 hours). We discussed that a move above 1154-1158 would lead to a move to the 1172-1188 and we have reached 1180.

    We are now at the red cycle and odds favor (75%) that we will see a high today or tomorrow. That still leaves the 25% potential that price can continue to rally until months end. Unfortunately, there are no absolutes in trading, only odds. Look for resistance at the red line (200 day moving average) near 1176 and then the upper trend line near 1188.



    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1295 – 1386

    Medium Term Trend ~bearish – Moving Averages 1163-1180

    Gold continues supporting at the 1080 price area and the 50% retracement of the entire bull market. Support remains that white line we bounced off on the lows and the three red lines under price. Until we crack below that level it is possible for gold to continue its quest higher at the moment. On a weekly basis, the 1172-1188 area is the resistance zone with 1211-1225 and 1258 as key reversal points. The dual yellow downtrend line is also key. As long as we are below that area, the downtrend on a medium term is still intact for now. On the downside, any weekly close below 1072 suggests the downtrend has resumed. Until then, it’s possible for gold to continue higher.



  • 07 Oct 2015 2:04 PM | Bill Downey (Administrator)
    Launch GoldTrends.net    


    Short term gold

    The rise from 1107 to 1132 in just 10 mins after the Non Farm Payroll has not pulled back at all.  I had anticipated that if the report was bullish for gold that 1122 would have been resistance, but it sliced right through it.  The pullback that developed Monday only got back to 1130.  This is the first display of strength Gold is displaying since August.  But as we can see below, It ended at the downtrend lines.  Gold has had a knack of just exceeding the lines and then it gets pushed down. It happened on August 24th (which created the middle line) and then got pushed down hard.  It happened again at the Sept high (1168) which created the third line and got pushed down to 1106.  Now it has happened again as we hit 1154 today.  1154-1158 is the last resistance until 1172 so it's a key area to watch.  A move to 1172 would be  a definite break of the down trend line at would set up 1172-1177 and potentially as high as 1199-1222.   





    The question or dilemma is whether the gold pulls back to the next cycle turn and stays inside the triangle of upper and lower trend line or whether it breaks higher into the next cycle turn on Oct 12th (plus or minus 72 hours).  If it does 1172-1177 will be next.



    I'll be working on a full update tonight for SUBSCRIBERS to the website and will try to find an entry point with the least risk.




  • 05 Oct 2015 9:11 PM | Bill Downey (Administrator)

    NEWSLETTER ~ October 6 2015

    Gold Report ~ Oct 6 2015

    Trend

    Long Term ~ Bearish- Need a monthly close above 1800 to confirm the bull market final phase underway. Need a monthly close above 1560 to neutralize the trend.

    Medium Term ~ Bearish- Need a monthly close above 1255 to remove bearish trend.

    Intermediate Term ~ Neutral– Need close above 1172 for bullish TREND.

    Short Term ~Neutral -  Need weekly close above 1148 for bullish

    Initial Resistance 1142-1148  2nd tier 1163-1172

    Support 1117-1127 2nd tier 1105-1112

    Our last update discussed the all important NFP (non-farm payroll report) and the number was not good for the economy.  Gold quickly moved up 30 dollars in the first hour after the report.   

    The jobs number came in sharply lower than expected. U.S. employers have not been hiring over the last two months and wages fell in September.  

    The weak jobs number is now raising new doubts on whether the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year

    The view of course is that rates are not going to go up as the USA would like.  Here’s what Martin Armstrong had to say today.

    Market Talk October 5th, 2015

    Posted on October 5, 2015  by  Martin Armstrong

    The market reaction to the US data on Friday has confused many with both stocks and Bonds bouncing into the close. Overnight the Asian equity markets have continued the positive response which has also carried into the European opening but interestingly – only for equities. The reaction in the bond markets is we have seen US 10’s remain just under the psychological 2% but the spread against German Bunds is where the interest is playing-out. The TY/RX spread has tightened this morning by 4bp to +144bp with US 10’s trading unchanged at 1.995% while Bunds are slightly higher at 0.555%.

    Talk between dealers after the US employment report is of the possibility of the Fed return to aggressive QE especially as the market re-prices the possibility of the a 2015 hike to around 8%. That talk has been around in Europe for a while so are we now due for the markets to start to re-price this differential. Government bonds at the front-end are already trading with negative yields as we also see in the interbank market but with banks offering either negligible or zero interest rates on saving/checking accounts banks are saying they do not need money.

    Within Europe MR. Draghi has already talked of increasing government bond purchases from 25% to 33% of single issue and in the quasi-sovereign market they already own roughly a third in total which has already been priced in.

    In peace times the weapon of war is currency and that has already started to play out with the Emerging Markets. Latin America, with the declining Argentinian Peso and Brazilian Real, is suffering significantly and they are looking to now issue even longer and longer term debt. As syndicate desks began to discuss this in the morning, there has been actually an argument to issue 100 and 150 year bond issues.

    (end of article)

    One of the major problems with raising rates is the dire condition of the global economy and its relation to the debt burden.

    IMF Flashes Warning Lights for $18 Trillion in Emerging-Market Corporate Debt 

    By  Ian Talley

    Emerging markets should brace for a rise in corporate failures as a debt-bloated firms struggle with souring growth and climbing borrowing costs, the International Monetary Fund warned Tuesday in a new report.

    From sugar firms in Brazil to pipe makers in Russia, firms in developing countries bulked up on cheap debt as central banks gassed the easy-money pedal in the wake of the financial crisis.

    Then, emerging markets were the drivers of global growth. Developing-country firms quadrupled their borrowing from around $4 trillion in 2004 to well over $18 trillion last year, with China accounting for a major share.

    Now, prospects in industrializing economies are weakening fast even as the U.S. Federal Reserve is getting set to raise interest rates for the first time in nearly a decade, a move that will raise borrowing costs around the world. The burden of 26% larger average corporate debt ratios and higher interest rates come as commodity prices plummet, a staple export for many emerging-market economies. Compounding problems, many firms borrowed heavily in dollars. As the greenback surges against the value of local currency revenues, it makes repaying those loans increasingly difficult.

    That massive debt build-up means it is “vital” for authorities to be increasingly vigilant, especially to threats to systemically important companies and the firms they have links to, including banks and other financial firms, the IMF said.

    “Monitoring vulnerable and systemically important firms, as well as banks and other sectors closely linked to them, is crucial,” said Gaston Gelos, head of the fund’s global financial stability division.

    Shocks to the corporate sector could quickly spill over to the financial sector “and generate a vicious cycle as banks curtail lending,” the IMF said.

    And emerging markets should also be prepared for the eventuality of corporate failures, it warned: “Where needed, insolvency regimes should be reformed to enable rapid resolution of both failed and salvageable firms.”

    The issue, presented in a report prepared ahead of the IMF’s annual meetings next week in Lima, Peru, will likely take center stage at the gathering of the world’s finance ministers and central bankers.

    The Institute of International Finance on Tuesday estimated global investors have sold roughly $40 billion worth of emerging-market assets in the third quarter of the year, which would make it the worst quarter of net-capital outflows since late 2008. The IIF represents around 500 of the world’s largest banks, hedge funds and other financial firms.

    Besides the petroleum sector, where borrowing didn’t anticipate the nosedive in prices, the construction industry is particularly exposed to the changing business climate, the IMF said.

    Worried about the building risks, investors have been selling out of many emerging markets, pushing down equity and exchange-rate prices, and pushing up borrowing costs. That market turmoil is exacerbating their economic woes.

    In Latin America’s six largest economies, for example, the average growth rate has fallen from 6% in 2010 to around 1% this year. Brazil’s central bank last week said the country’s recession is far worse than expected.

    China’s recent market turmoil and faster-than-expected economic slowdown is in large part fed by worries over the massive rise in China’s borrowing and whether the economy is vulnerable to a host of credit-driven bubbles in real estate, construction and other sectors.

    Rapid credit growth has been a harbinger of previous emerging market crises. While economists say many countries have learned from the past by building up currency reserves and allowing flexible exchange rates to buffer against downturns, the mounting risks for many emerging markets are fueling worries across the globe.

    Further complicating emerging market problems, the changing structure of financial markets leaves many developing economies exposed to major outflows of capital as investors scramble to exit. That can lead to fire sales and a breakdown in markets.

    “In extreme conditions, markets can freeze altogether, and affect the financial system more broadly, as seen during the global financial crisis,” Mr. Gelos said.

    To help guard against building risks, the IMF said policy makers should introduce stronger financial regulations such as higher cash buffers for exchange-rate exposures and conduct stress tests to weed out problem firms.

    (end of Article)

    But what about USA?  How well is it really doing?

    The charts and commentary by Elliot Wave International below should give you a good idea.

     

    Labor Force Participation. The government releases its official unemployment rate each month, and that number today is about 5.1%.

    But: They don’t count you as unemployed if you work par-time and want to work full-time. And, they don’t count you unless you've actively looked for work in the past month.

    To get a more accurate picture, you need to ask, "What percentage of the working-age population is employed?"

    Here’s the answer.

    The steep decline began in 2007 and has kept going ever since. The longer term picture here is also more grim. This low is actually the lowest level of participation in 38 years.

    Workers’ share of the economy. This tangible comparison shows the long-term decline of worker income. Specifically, wages and salaries as a percentage of GDP. Again, not what a ‘recovery’ should look like. 

    Food stamps. The dollar amount of food stamps annually has more than doubled since 2007. Here too, the need is nowhere close to returning to pre-recession levels.

    Home ownership – is one those under-reported trends. Despite years of low interest rates, the percentage of U.S. families owning a home is in sharp decline. This is more than a 10-year low. The very long-term data show this is the lowest level of homeownership in 48 years.

    Federal debt as a percentage of US GDP. The actual dollar amount of this debt is around $18 trillion -- with a “T.” It’s hard to see a ‘recovery’ here. The debt hasn’t begun to return to the pre-recession levels of 2007.

    Money-printing. More than just paper dollars, this is how much liquidity the Fed pumps into the economy – mostly as excess reserves for major banks. Which is to say, lenders have a supply of money ($4 trillion from under $1 trillion in 2007) but there’s very little demand from borrowers.

    (End of Article)

    So where do we stand?  War is coming.

    Again we turn to commentary by Martin Armstrong…

    As CNN pointed out, the bombing continues. Now, hundreds of Iranian troops have arrived in Syria to join a major ground offensive in support of President Bashar al-Assad’s government. Clearly, the civil war in Syria is escalating. We will see this unfold as a proxy war directly between U.S. and Russia with China supporting the Russian side in this game. This conflict is turning regional and global in scope by drawing in the world powers all because the U.S. war machine thinks this is a game.

    Russian warplanes have been targeting rebels trained by the U.S. Central Intelligence Agency, placing Moscow and Washington on opposing sides in a Middle East conflict for the first time since the Cold War. This should be of great concern because historically, these things become an important event. As the economy in Russia turns down, the government needs a distraction and this is it. We will see the same trend emerge in the USA when the economy turns down, as war is necessary to distract the people from the non-establishment candidates for 2016, the social defaults, and the need to raise taxes for war.

    (end of Article)

    What about gold?

    If the Fed increases the money supply, it will NOT drive gold higher. Gold will rise when confidence in government declines. That is the issue.

    Gold went down from 1980 to 1999 while the money supply rose considerably.  Gold rose from 2001 to 2011 because the banking system was coming under duress and the loss of confidence in Government.  Gold declined from 2011 once that fear abated, and yet the money supply doubled. 

    Gold will begin its rise once the confidence of government is lost.

    Whether that is in line if QE4 is announced is a matter which remains to be seen.

    All in all, we are now in the window of time for a long term low (Oct 2015-June 2016).  Whether we have seen the final low in gold is yet to be determined.  We still need to see more upside action to proclaim the final low is in place.  One thing for sure, we are getting close now to the long term low. 


    Gold Short term

    We discussed Friday on the gold report for subscribers that It came down to whether gold would hold the 1097-1105 area.  If it held, we favored a test of 1122.  On the signals page, we discussed a trade of buying gold at 1107 (with a stop at 1097) could lead to a move to 1142.  We hit 1142 today.  If you took that trade move your stop to 1119 or look to take profits now or near 1172. 

    On the very short term, gold has resistance at 1142-1148 and 1165-1172.  We reached 1142 on Monday.  Any pullback should find support at 1119-1125.  There is minor support near 1131 (the 200 hour moving average).   This view has gold NEUTRAL as the blue moving average is still below the green.  Tuesday resistance should be 1142-1148.   


     

    On an intermediate term basis, we can see that gold is trapped in a triangle formation and under the 2015 downtrend line.  A close above 1148 should lead to higher prices (1165-1172) next.  Here too the moving averages highlight 1121-1126 as support on pullbacks.  A close above 1148 flips the trend bullish.  

     


    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1295 – 1386

    Medium Term Trend ~bearish – Moving Averages 1163-1182

    Gold continues supporting at the 1080 price area and the 50% retracement of the entire bull market.   Support remains that white line we bounced off on the lows and the three red lines under price.  Until we crack below that level it is possible for gold to continue its quest higher at the moment.  On a weekly basis, the 1163-1182 area is the resistance zone with 1222-1258 as key reversal points.  The dual yellow downtrend line is also key.  As long as we are below that area, the downtrend on a medium term is still intact for now.  On the downside, any weekly close below 1072 suggests the downtrend has resumed.  Until then, its possible for gold to continue higher. 




  • 23 Sep 2015 3:20 PM | Bill Downey (Administrator)

    Gold Short term

    Gold’s pullback on Tuesday held the now KEY WEEKLY 1115-1122 area and has now bounce back to resistance near 1132.  We have 1132-1136 and also the gold downtrend line (which is the 2015 downtrend) right near 1140.   In addition the 1148-1152 area is final resistance until around 1172.   The key now is if we can hold the Tuesday low of 1122.  If so then a test of the 1134-1142 and potentially 1148-1152 should take place.  At least that’s what the odds favor.  Bottom line is if we lose 1115-1122 all bets are off for higher towards 1148.  The moving average resistance on the blue 89 hour is also at 1132 so that is the key area (1132-1136) to watch Wednesday.


    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1295 – 1386

    Medium Term Trend ~bearish – Moving Averages 1184-1226

    Gold continues supporting at the 1080 price area and the 50% retracement of the entire bull market.  The pullback to 1100 last week however held and the possibility that the bounce was complete has changed as gold closed back above 1122 last week.  Support remains that white line we bounced off on the lows and the three red lines under price.  Until we crack below that level it is possible for gold to continue its quest higher at the moment.  On a weekly basis, the 1172-1190 area is the resistance zone with 1222-1258 as key reversal points.  The dual yellow downtrend line is also key.  As long as we are below that area, the downtrend on a medium term is still intact for now.  On the downside, any weekly close below 1072 suggests the downtrend has resumed.  

    Gold weekly price chart with support and resistance lines



  • 11 Sep 2015 10:43 AM | Bill Downey (Administrator)

    Gold Medium Term

    Long Term Trend ~ Bearish since Oct 2013 @ 1361

    Long term Moving averages 1350 – 1429

    Medium Term Trend ~bearish – Moving Averages 1177-1192

    Gold supporting at the 1080 price area and the 50% retracement of the entire bull market had August moving higher from 1077 to 1167.  But now it is possible that the bounce is complete.  Support remains that white line we bounced off on the lows and the three red lines under price.  Until we get above that dual yellow downtrend line, the medium term trend in gold remains down.  

       

     Gold weekly price chart with support and resistance lines

  • 03 Sep 2015 10:40 AM | Bill Downey (Administrator)

    Gold Report ~ Sep 3 2015

    Short Term ~Neutral– A close below 1103-1109 would go back to bearish.

    Initial Resistance 1134-1137  2nd tier 1147-1153

    Support 1115-1122 2nd tier 1107-1112

    Our last subscriber update gave support at 1121-1126 and the low since then so far is 1122.  Resistance was listed at 1140-1150 and the high since then has been 1147.  

    We have long discussed the coming liquidity crisis and debt collapse and the action in August warns we are getting much closer to such an event unfolding.  This event will take about 4 years to play out.  

    What we are going to see first is a continued effort by the governments to confiscate as much of your money as possible, to disarm you and to eliminate cash and go to electronic money.  During that time public confidence is going to turn against government and as far as gold having its day, it will come during the collapse in confidence and the rise in interest rates.

    Gold Short term

    The key area to watch is the pivot in the 1115-1122 area.  If we lose that support on a closing basis then odds favor we move to either the 1110 area or 1095.   Any close below 1109 and we should see prices back under 1100.

    Resistance now builds at the 1134-1137 area and 1147-1153.   A weekly close above 1149 would favor higher into mid-month towards 1172-1200.   A weekly close below 1109 would favor lower into mid-month.   

    That’s really the short term bottom line………we must hold 1115-1122 or we’re heading towards those lower price points short term.   On the upside we need to close back above 1136 and then a weekly above 1148 if the rally is to continue. 

     Gold hourly price chart

     

    What next?

    IT comes down now to whether the short term cycles do their work.  They do 75% of the time, but there is no such indicator that always works.  If they play out, gold should rally to mid month and then turn down.

    The showdown should be the NFP report on Friday morning as to the short term trend.


    Bottom Line

    It is not out of the question to say that the gold bottom is in place as we have had a 50% retracement of the entire rally since 1999.   But there is still no indication that the TREND on a medium term basis has turned up.   Its best to remain cautious, and to continue to believe that the downtrend in gold is not yet complete.   

    September is a transitory month and it has been the killer month for gold since 2011.  If we are still in a bear market gold could very well turn down again this month.

    We need a weekly close above 1148 in order to favor higher prices towards 1172-1200.  Until then, proceed with caution.


  • 30 Aug 2015 9:47 PM | Bill Downey (Administrator)

    Launch www.GoldTrends.net 

    We are working on an update for later tonight.  But lets look at the aspect of short term timing and our short term cycles.

    First off, there are no technical or any other indicators that will work for timing or trend changes 100% of the time.  Indeed, many are often no better than 50/50.  That means guessing is just as right.  Sometimes they work and sometimes they don't.   In the world of cycles, many expect the cycles to have EXACT time at each cycle.   That's like expecting winter to START no earlier and no later than Dec 21st.   

    In other words cycles have standard deviation time.   In the short term cycle below, its plus or minus 72 hours. 

    In a bull market ,  Blue lows and red highs are the "preferred" rotation in bullish markets.  

    When we have RED bottoms and blue tops ---- the cycle inverts and the rotation changes. 

    Gold Cycles

    In gold cycles,   a bear market rally usually (but not always) during August.   They usually peak during the 1st two weeks of Sept.

    In a bull market --- the summer rally last until Mid October, down in November and BACK up until mid-February--- and in real strong markets, until Mid March.

    Two weeks ago,  price had broken down on the red cycle and all was running ok in cycle land.  But the Yuan devaluation and its major downturn in equities as well as a global recession on the horizon, coming debt default and there's giving a lot to think about.

    When we have tremendous corrections in other markets, gold reacts.  When you look at the chart, gold turned down on the last red cycle right on time.   But there was too much pressure in the global markets and gold had a three day reaction higher at that time.  Since then, gold moved lower into late last week just under 1120 before the bounce on Friday.  

    Now lets look back at the chart.  A blue cycle low is due Aug 29th (plus or minus 72 hours).  Thus the window for a turn opened up Friday (and that was the low so far on the pullback.   That means gold bottomed on Friday -- OR--- has about a 75% chance of making a short term bottom between now Wednesday and turning up into mid month.  

    A few things to consider........  

    First the global markets are in turmoil and as you saw last week,   gold did and inverted the cycle.  In other words,   we have a 75% chance of making a bottom and a rally to mid -month.  75 % is not 100%.  Keep that in mind. Second is if gold is still in a bear market as it has since 2011,   then the rally is due to peak in September.   Sometimes there are major turns in markets right after labor day.  

    That still doesn't solve whether we rally to mid- month beginning this week or  if gold will have a 2nd inversion at this blue cycle and keep moving lower to mid-month.   From an odds standpoint,  its only a 5% chance of a 2nd inversion in a row.  They are rare------ but i've seen a handful.  And they often occur during volatile situations like is occuring in China, Europe and many other nations.

    Third ---- its the end of the month (Aug) and that means Futures trading has now (for the most part moved to the DEC futures.  That sometimes can make for a tricky day in price. 

    Finally looking back at the chart we see the CHANNEL line running across last weeks low.  NOW PRICE HAS TO BREAK THAT DOWNTRENDING channel that has been capping the price action.   

    Friday's price action closed right at the 50 day average.  Watch that area.  We'll have more on the subscriber update, which we are trying to have by tonight --- or tomorrow morning at the latest. As for a trade,  that blue line on the chart  WHERE PRICE HIT on last weeks low also is an  area to watch carefully. I have no recommendation for a trade entry just yet, and I don't like to initiate a trade on SUNDAY nights. We will be watching closely tomorrow morning on the price action for clues and if gold can turn up.  We will publish the full gold report at that time.

     

  • 24 Aug 2015 11:05 AM | Bill Downey (Administrator)
    Launch GoldTrends.net    



    The gold rally we had did initially peak at 1126, but the pullback found support just under 1110 and the destruction in the world stock markets, the devaluation of the Chinese Yuan, and the major global slowdown we have been expecting as well as the coming debt default is well underway.

    This has spurred some money coming out of stocks and currencies into gold (and the US bond market).   There was a heavy load of short positions in gold and the buying has induced a lot of short covering.

    When we take into account that 1080 was a 50% retracement of the entire gold rally since 1999,  prices ran beyond 1126 in a cycle inversion and price has reached the next resistance targets.

    On the chart below we can see that 1167-1173 is where we should expect the next resistance point and that has been in play since Thursday.   The pullback to 1149 has held and we are testing resistance again.   The other area of potential is 1194-1204.   We can't rule that out because the PATTERN on the chart since the low looks impulsive.   But lets go to the next chart .



    The concern here is silver.   If this were a true bull market taking off, silver should not be acting this way.   They almost always are joined in lockstep during a move.   Of course,  this time we are facing a global currency crisis and certainly that has to be taken into account as gold (in the end) is the ultimate currency.  But we certainly should be on guard due to its action.   It should at least hold gold today in the 1167-1173 area.  Let's look at one more chart.




    The currency and stock market panic did invoke a cycle inversion on our last red cycle.  As you can see, pricese began the selloff but the money flow into gold was too much and we have inverted.  This will lead to a blue cycle high and that is a BEARISH rotation when blue cycle highs occur.   But could gold invert again at a blue cycle?   Yes,  but we have only seen 3 in the past 10 years so it is not a high odds favored event.   So yes, it can,  but the odds are low.   You can see we are at resistance here also on the daily chart.   However, if it is penetrated and we close above 1172, then the 200 day average near 1186 will become the next target.  

    In summary, its best to lay low for today and see if 1167-1173 holds price.  Cycles still point higher into the end of the week but in order to enter a position here would not have high risk reward ratio's.   Perhaps a pullback to the 50 day blue average at 1137 would be a consideration.   It will be interesting to see how silver react's also as it doesn't look good.   I'll do a full daily update this evening with other charts and dialog and consider if we should enter on a pullback. 










Technical Analysis :: Gold & Silver

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