Category Archives: Metals

Gold Update…Santa Rally or Bust?

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I last wrote about gold in my post of October 9th.

Price is slipping back to its critical triple-bottom support level of 1180, as shown on the 5-Year Weekly chart below. I’m watching for a break and hold below that level for a possible re-test of the 1000 level as I mentioned in that post…particularly if the SPX:VIX ratio breaks and holds above the 150.00 level, as I mentioned in my post of October 24th.

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Not So Precious

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I mentioned off-handedly to my Slope Plus subscribers yesterday that gold was my biggest short position. Well, “precious” metals are getting slaughtered (again) this morning, with silver being hit particularly hard. It certainly is puzzling, given the trillions of new fiat dollars kicking around, but there you have it.

1030-sil

USD Dollar and FOMC Today

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SPX broke strong resistance levels at the 50 DMA and the 1976-8 level yesterday to close at a very impressive 1985. That break up over the 50 DMA opens up the daily upper band as a target and that closed yesterday at 2003. With FOMC today it seems unlikely that Yellen can say a great deal to cheer the markets, QE3 has ended and is unlikely to be even temporarily revived, and the Fed has made so many soothing noises about future interest rate rises already that it’s hard to see what they could add to that. Nonetheless some more soothing noises today might just get SPX to that target at the upper band. SPX daily chart:

141029 SPX Daily Trendlines BBs MAs

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Triple-Bottom Bounce on Gold After Re-test of Critical Support Level

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As shown on the 5-Year Weekly chart of GOLD below, price has bounced this week [as of today (Thursday)] at a triple-bottom major support level of 1180, which began in June of 2013.

This critical support level converges with the bottom of the weekly Bollinger Band, along with the lower edge of a large declining channel (which began after the all-time high of 1923.70 was made during the week of September 5th, 2011).

Failure to hold above the critical 1180 support level could see a much larger decline ahead, possibly to the 1000 level, as shown on the next 20-Year Weekly chart. Bulls will need to re-take 1300 and hold that level before we likely see any further serious commitment to, ultimately, reverse this long-standing downtrend on the weekly timeframe. (more…)

Gold; a Simpleton’s View

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First off, if you have an interest in the price of gold and have not already done so, I highly recommend you check out Steve Hochberg’s 2-part Elliott Wave video presentation on gold (I want to disclose that signing up for Club EWI brings a small commission to yours truly ;-) ). With all his zigs, zags, waves and patterns he ends up at the same place I do with my simple version. I may use less cluttered methods, but I find this stuff very interesting.

With markets at a key juncture, the US dollar over bought (but bullish), the precious metals, commodities and increasingly, global markets over sold but bearish and US stocks acting as if October 2014 could at least recall memories of October 2008, I want to try to weave all this together around the simplistic monthly chart of gold, which is the asset that would provide liquidity for asset market refugees if the macro really were to get very negative. (more…)

Stealth Gold Stock Rally

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Well, the headlines are rightfully bearish for gold, silver and the major precious metals stock indexes, ETFs and senior gold miners. The technical damage is real. Today’s burst could be and probably is just short covering. [edit; post was mostly written before the end of day flop]

But improbably enough, there is a stealth uptrend going on in certain royalties, miners, developers and explorers. Believe me, if you could hear me talk instead of write you would not hear anything resembling desperation in my tone. That is because I have worked hard during this bear market to manage risk, stay strong and out of the bear’s way. So I am not talking any sort of a book here other than my biggest picture view (an economic contraction environment that ultimately benefits the counter cyclical gold sector), which could still be out on the horizon. (more…)