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
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

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

Gold Price Dips!

Commodities / Gold and Silver 2010 Jun 28, 2010 - 05:54 PM GMT

By: Steve_Betts


Best Financial Markets Analysis Article"The greatest of all infidelities is the fear that the truth will be bad." --- Herbert Spencer - (1820-1903) British author, economist, philosopher

We might as well start the week out right and talk about gold. Today we see typical behavior with respect to the yellow metal as it grew gradually stronger in the morning as the spot price traded as high as 1,263.90. Then at 11 am EST someone came in and knocked the price down to 1,234.70 in a matter of thirty minutes or so. Right now at 12:35 am EST the spot price is trading at 1,242.50, and if things run true to form, the spot price will eventually crawl its way back up toward unchanged, or maybe even slightly higher. We saw similar reactions last week, it’s a commonplace occurrence going back more than a month, and investors find it upsetting. I know it upsets them because I read their e-mails! The problem is a matter of perception.

Investors look at the bull market in gold the same way they looked at the bull market in housing or the NASDAQ, and that is a big mistake. They fail to understand that both the NASDAQ and housing were government nourished bull markets in the sense that they promoted it and did everything possible to prolong it. The opposite is true with gold. The Fed does everything possible to suppress the price of gold and as a result gold acts differently than what most people would expect.   

Below I have posted two daily charts with respect to the movements in the price of gold. The first highlights the secondary trend:



while the second highlights the tertiary trend:



In both charts you can see clearly that price is trending higher and is not in jeopardy of breaking down. In the second chart you can also see that since the last significant decline in late May, gold has traced out three higher highs (horizontal green lines) and three higher lows (horizontal orange line). What’s more you can see that RSI, MACD, and the histogram are slowly “grinding higher”, with the emphasis on the word grinding. From the bear market bottom in 2000 until late 2009 gold was characterized by explosive moves in both directions, but this tertiary trend marked a change in behavior. Gold now grinds higher day in and day out and attempts to push it lower only make it grind that much more.

No matter how good of an analyst you are, how sure of yourself you are, or how unemotional you are, doubt can always creep in. One of the best remedies for doubt is to focus on a Point & Figure chart as it reduces everything down to the most important of all variables, and that’s price:



Here you can see that gold maintains a bullish price target of 1,310.00 and that is still 7% above the current price. What’s more the fact that the primary, secondary, and tertiary trends are all pointed higher, and in no danger of being overbought thanks to gold’s grinding action, tells me that we’ll soon see higher gold prices. First the yellow metal will tackle strong resistance at 1,298.10, and then it will go after the next level of resistance at 1,372.80 by late summer.

A look at the Point & Figure charts for both silver and the HUI tell a similar story:




and that’s important because it means that all three elements are now on the same page and working to support each other. What’s more you can look at today’s action in the HUI and you’ll see that it’s actually held up quite well (down four points at 12:20 pm EST) in spite of the weakness in gold. Likewise July silver is holding above good support at 18.86 and that is the type of behavior we would look for and expect in a strong gold market.

In a world full of economic, political, and moral uncertainties, and where the rule of law is an afterthought, it only stands to reason that smart money would run to gold. That’s why it’s still in the second phase of its bull market. The general public has little or no knowledge of gold and the price will truly not surge until the general public piles in, and they will. It’s just a question of when. One thing to keep in mind is that the act of buying gold, either in physical or paper form, does not guarantee that you’ll escape the brunt of the economic problems coming down the road. Confiscation, markets like the COMEX that could fail, taxes on precious metals, bank failures that take you security deposit boxes with it, diluted gold bars, ingots, and coins, and exorbitant storage costs are just a short list of the problems that you could face depending on where you live. Then there will be problems of civil unrest and looting as mobs try to take matters into their own hands. Buying gold is only half the battle; hanging on to it will be the equally important other half as we head for challenging times.

                  PORTFOLIO SUMMARY (thru June 25th)


Sept Dow          Short      2           10,210                   10,099                2,220

Mini-SepDow   Short      1             9,850                   10,099               -1,250

Dec Gold           Long      1          1,219.0                  1,256.2                3,720

Dec Gold           Long      1          1,248.0                  1,256.2                   820

*July Copper   Short      1             293.0                     304.0                  -550

Aug Oil             Short      1             79.65                     78.86                   790

*Sept Bond      Short       1           124.08                   123.28                   341

*Position closed


[Please note that the new website at will become operational this week. Also, note that you can contact us at our new e-mails, (general inquiries regarding services), (administrative issues) or (any market related observations).]

By Steve Betts

Web site:

The Stock Market Barometer: Properly Applied Information Is Power

Through the utilization of our service you'll begin to grasp that the market is a forward looking instrument. You'll cease to be a prisoner of the past and you'll stop looking to the financial news networks for answers that aren't there. The end result is an improvement in your trading account. Subscribers will enjoy forward looking Daily Reports that are not fixated on yesterday's news, complete with daily, weekly, and monthly charts. In addition, you'll have a password that allows access to historical information that is updated daily. Read a sample of our work, subscribe, and your service will begin the very next day

© 2010 Copyright The Stock Market Barometer- 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.

© 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