Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

GOLD Analysis and Trading Strategy

Commodities / Gold & Silver 2009 Jun 22, 2009 - 02:16 PM GMT

By: Florian_Grummes


Best Financial Markets Analysis ArticleHere is my bi-weekly gold report in different currencies.

Gold spot price Analysis - Gold in USD (1 ounce = US$ 933.50)

The correction since the top from US$990 (3rd of June) continued as expected during the last 2 weeks. So far the lows have been seen last Monday at US$925.

Gold Strategy

Gold Analysis

In the bigger picture the correction since the all time high in March 2008 (US$ 1.037) is still in play. To end the correction a sustainable move above of the US$1.000 mark is necessary. (Note: It took the Dow Jones more than two years to break through the very important psychological barrier of 1000 points).

Until now the sell off is pretty slow. The 50d MA (US$ 924.28) has already been tested. The lower Bollinger Band (US$ 922.07) supports that area too. Also the 50% Fibonacchi Retracement has been hit.

If the support at US$ 930-925 fails we will probably see a further and accelerated correction down to the slowly rising 200d MA (actually US$ 870.14). The 200d MA is the next really strong support.

Short term gold gained only a few dollars since the low at US$ 925. Every recovery failed already at the level of US$940. That is a clear sign of weakness. In previous times the price of gold turned quite fast as soon as the market had reached the bottom. Until now we have not seen this pattern.

As well the Gold market right now is completely depending on the development in the US-Dollar The Dollar Index could rise back up to its 200d MA at around 83.50 during the next couple of months.

During the coming summer months I expect a continued correction. But in the very short term gold is oversold and in case that the US$930 should hold I expect a bounce back to US$950-965. After that we should see a test of the 200d MA below US$900.

Any move above US$965 instead would be a clear buying signal and should lead to a quick move above US$1.000.

The long term technical & fundamental perspective for gold is still super bullish. The next price targets are the FibonacciExtensions of the correction since March 2008 at 1250$ and 1600$. These should be reached until spring 2010.

Das DowJones/Gold Ratio is actually 9.14. That ratio nearly didn’t change throughout the last four weeks.  But now it seems that the stock markets have seen their tops and the trend is turning down. The DAX is already clearly below 5.000 points. The summer is coming and the trading volume is getting lower.

Long term I expect the price of gold moving towards parity to the Dow Jones (=1:1) The next primary cyclical change is still years away. This means we are still in a long-term bull market in gold (and also commodities) and in a secular bear market in the broad stock market.

Gold in EUR (one ounce = 669.89€)

Gold Trend Strategy

Gold Analysis Trading

  1. EUR-Gold lost about 2% per ounce (13.30€ ) since the last issue.
  2. This means that the 50d MA at 679€ is now broken and during the summer the rising 200d MA (actually 651€) will probably be tested.
  3. Both Bollinger Bands indicate a further down move. Altogether EUR-Gold moves in a relatively tight sideways range. After the break of 680€ you should expect a further down move to 650€.
  4. Be consequent and buy physical bullion with prices below 670€.

Gold COT Situation

Gold Cot date

  1. The COT data are still the main reason why I am so skeptic about a Gold rally in the next few weeks & months.
  2. The well-informed commercials did only cover 7,5% of their short positions during the last couple of weeks while Gold itself lost more than US$60. This means we have to expect more correction to the downside.
  3. I still believe that a new big sustainable rally in the price of gold will only start, if the commercials reduce their short positions below 100.000 contracts.

17.02.2009 = -196.360  ( PoG Low of the day = US$ 970 )
10.03.2009 = -172.851  ( PoG Low of the day = US$ 892 )
18.04.2009 = -153.419  ( PoG Low of the day = US$ 885 )
19.05.2009 = -183.065  ( PoG Low of the day = US$ 920 )
26.05.2009 = -208.136  ( PoG Low of the day = US$ 939 )
02.06.2009 = -226.521  ( PoG Low of the day = US$ 970 )
09.06.2009 = -225.047  ( PoG Low of the day = US$ 947 )

16.06.2009 = -207.368  ( PoG Low of the day = US$ 929 )

Gold Seasonality

According to the typical seasonal pattern we have witnessed the high of the winter rally at US$1.006 in late February.

The spring top, which is normally lower than the winter top, was reached on the 3rd of June at US$ 990.

The summer is coming: during that period of the year the volume is reduced and most of the markets are moving lower. So enjoy the sun and your holidays.

Gold Sentiment

The sentiment is still too bullish – analysts, investment newsletters and investment websites are very positive for gold. Normally the majority is wrong and a new strong rally needs a pessimistic expectancy of the masses. Before the strongest bull markets the majority of the investors normally gets kicked out while the „smart“ money can position itself on the right side in preparation for the next move.


It is not easy to interpret the current correction. But I expect that we will see prices around US$900 within the next weeks. Prerequisite for this is an ongoing recovery in the US-Dollar Index.

In the moment it is impossible to say, whether we will see a next fulminate up move in late summer/ early autumn. Actually the COT data contradict that. If the stock market takes another hit down gold and especially gold stocks will face selling pressure. Also the physical demand is pretty weak. From that perspective the probability of a strong sell off down to US$700 has risen.

A lot of analysts expect a dramatic inflation very soon to happen – but since summer 2007 we have faced a heavy loss of assets worth around 50 trillion USD worldwide. Compared to that all the money spent by the governments and central banks are a drop in the bucket. For the moment the banks will repair their balance sheets (= deleverage) and be quite cautious with lending money.

Goldmining stocks Analysis

Goldbugs Index USD (339.88 points)

Gold Analysis Report

Gold Strategy Report

In the last 20 days the HUI lost around 19%. Since the low on Thursday around 328 points the index recovered 4,5% so far.

The correction stopped pretty exactly at the 61,8% Fibonacchi Retracement of the last bull move since mid of April. As well at this level the 50d MA (actually 336.83) and the lower Bollinger Band (actually 323,90) support the market.

Short term the gold mining stocks are oversold and a recovery would not be a surprise. This short term bounce could reach the level of 355 – 375 points. After this I expect another down move. The flat 200d MA (actually 286.38) is more than 50 points away and indicates more need for correction.

A look on the weekly chart shows that a correction can go down to 250 points over the next months. At 250 we can find the 61,8% Fibonacchi Retracement of the complete rally since last November. Most importantly the PPO/MACD indicator on the weekly chart clearly shows that there might come much better entry points for buying the gold mining sector again.

To get my Free Gold Trading Analysis & Strategy please visit my website at:

By Florian Grummes

Learn to Trade ETF's While Your Making Money Trading

© 2009 Copyright Florian Grummes - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Florian Grummes Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules