Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Good Time For Investors To Get Back Into Gold And Mining Stocks?

Commodities / Gold & Silver 2009 Dec 24, 2009 - 04:14 AM GMT

By: Przemyslaw_Radomski

Commodities

Best Financial Markets Analysis ArticlePlease imagine a private room at a posh downtown restaurant. The guest list is invitation only and limited to the wealthiest clients of Bank Edmond de Rothschild, which specializes in private banking and wealth management. Rothschild is legendary with a reputation that has made the name synonymous with banking for several centuries. The family-owned bank has been passed down through generations and kept its reputation and solvency despite political turmoil, wars, persecutions, revolutions and market upheavals. It has done so with what the Rothschilds like to call “instinctive caution.&


Two leading in-house experts were flown in to meet with the clients at the posh restaurant to deliver a year’s end economic report and a look at what’s ahead.

The title of the talk was “Back to Growth, But Not Yet Back to Health.”

Although talk about gold was somewhere towards the middle of the lecture, I’ll skip to that, because that is what interests us the most. The savvy folks at the Edmond de Rothschild bank are looking at two target prices, the first at $1,500 and the second at $2,000. The reason is simple, they say, less supply and more demand with central banks being net buyers rather than net sellers. Please note that the first of these two targets is in perfect tune with what I wrote previously after analyzing the very-long-term chart of gold.

We have been a fly on the wall at an exclusive briefing by some of the savviest, most conservative and cautious investors in the world.  And they like gold. So if super conservative investors like the people at Bank Edmond de Rothschild are on the gold bandwagon, does that mean we are close to the end of the ride?

You can do your own gold bubble test during this holiday season when you see lots of friends and family members at parties.

Ask people if they own gold, or if they know why gold has climbed from $650 to over $1,100 in the past three years and see what they say. 

The average person has heard about gold on television and in the media, but has no idea why it’s rising, who is buying it, and how far did previous bull markets took PMs in the past. They might even like to buy it, but don’t really know how.

Baron Benjamin de Rothschild writes in a letter to the bank’s investors that the Chinese world for “crisis” is written with two ideograms, one meaning danger and the other opportunity. More comments are on that topic are available in the full version of this essay.

I hope that in the coming year we will avoid danger and embrace opportunity. The best way to do that is to see what the charts can teach us. Let’s begin with the gold chart (charts courtesy of http://stockcharts.com).

The long-term chart didn't change much since the previous Premium Update was posted. Back then I wrote the following:

Taking a closer look results in one more support level that was previously rather invisible - the $105 level in the GLD ETF. This is the price that stopped the initial post-$1,000-breakout rally, and it currently corresponds also to the medium term support line. This may stop the decline for a while (and both indicators on the above chart: RSI and Stochastic confirm this) (…).

The above applies also this week, but please note that this time the price of gold is very close to the long-term support level (rising thick blue line) - the aforementioned $105 level. It is also currently in the area marked with red ellipse, which suggests that the bottom may be very close.

Moving on to the situation in the precious metals stocks sector, let's take a look at the long-term chart of the HUI Index.

The situation didn't change much from the long-term point of view since the last week. Back then I wrote the following:

Please take a look at the thin blue lines coming from the same price/time combination. Each of them was pierced, before the final bottom was put in, and this is what I expect to take place this time.

The very long-term support line has just been touched. The HUI Index even moved below it on an intra-day basis, but finally closed above this level. Therefore, taking the historical performance of the gold stock sector, it seems that PMs will need to move a little lower before putting a bottom.

The additional confirmation comes from the analysis of the Gold Miners Bullish Percent Index (a market breadth/momentum indicator that is calculated by dividing two numbers: the amount of gold stocks on the buy signal (according to the point and figure chart, which emphasizes strong moves while ignoring small ones) and the amount of all gold stocks in the sector.)

The above chart features the particularly favorable moments for opening long positions in PM stocks. These moments are created by three signals: the value of the index declined significantly, the value of RSI is below 30 and the value of William's %R is below -80. This has been the case for several days now, but please note that the buying opportunity used to emerge several days after the initial signal, so this is what I expect also here.

Naturally, this is not a signal for day-trading, but rather for estimating the medium term bottoms / tops. The implications of the above analysis are in tune with what I wrote previously - we are at / near a buying opportunity from the long-term point of view, but the short-term situation is still cloudy. The analysis of short-term charts, comments on the changes in the strength of influence from each of the key drivers of PMs, signals from our unique indicators and much more is available to my Subscribers..

Summing up, gold is currently in the area that I've marked as the level that is likely to contain the end of the current decline. The area is relatively big, which makes this signal not very useful for day-traders, but if you were waiting on the sidelines with your long-term capital in order to get back on the long side of the gold market - it seems that this is a good moment to do so. If you prefer to enter the market over a few days instead of making one single big purchase (I'm not advocating dollar-cost-averaging over several weeks / months - the explanation is in the Key Principles section), it might be a good idea to start now/soon.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time.

I would like to take this opportunity to wish a happy and wonderful Holiday Season to you and your families.

P. Radomski
Editor
Sunshine Profits

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

    Sunshine Profits provides professional support for precious metals Investors and Traders.

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free trial to see if the Premium Service meets your expectations.

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2019 http://www.MarketOracle.co.uk - 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