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
GDX Gold Stocks ETF - 25th June 19
What Does Facebook’s LIBRA New Crytocurrency Really Offer? - 25th June 19
Why Bond Investors MUST Be Paying Attention to Puerto Rico - 25th June 19
The Next Great Depression in the Making - 25th June 19
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

Gold Reversal Ahead?

Commodities / Gold and Silver 2011 Mar 13, 2011 - 12:10 PM GMT

By: Merv_Burak

Commodities

Best Financial Markets Analysis ArticleOver the past several days gold has been hitting all time highs BUT the momentum indicator was telling us that the move was on greatly diminished strength.  Reversal Ahead?


GOLD :LONG TERM

From the long term stand point we are still nowhere in trouble with this bull market but things are starting to show weakness.  Gold remains above its positive sloping long term moving average line.  The long term momentum indicator (I use the 150 day RSI) remains in its positive zone but has now moved below its trigger line, although the trigger is still in a positive slope so this is just the very first stage of a momentum warning.  The momentum indicator is well below its levels from the Nov to Dec period when gold was about at the same price level as now.  The one indicator that continues to be on a tear is the volume indicator.  It is still right up there at all time high levels and above its positive sloping trigger line.  All in all the long term rating remains BULLISH.

INTERMEDIATE TERM

A two year bull move seems to be sputtering and having difficulty moving higher.  The chart very clearly shows the topping process with the intermediate term momentum showing continued reduced strength as gold was trying for higher ground.  Since the momentum indicator reached into its overbought zone way back in early Dec of 2009 the subsequent new highs have been on lower and lower momentum readings.  Although we usually look at the neutral momentum line (at 50%) as the dividing line between positive and negative momentum gold seems to have established a very solid level at about the 47.5% level as the strong support level.  This is the level to now watch to see if the momentum shifts to the negative side.  Yes, the momentum is heading lower and one can say its trend is negative but it is still slightly inside its positive zone.  With all that has been going on in the world these past several weeks one should have expected gold to be zooming into the stratosphere.  The momentum indicator shows that, at this time, the strength is just not there for such move.

The other feature that jumps out at you is the long up trending channel that has trapped gold for the past two years.  Remember, momentum is a warning.  One would not declare the direction of the security based solely on momentum.  One needs to also check the trend of the price.  The price could continue on its merry way for a long time with a steadily diminished momentum reading so it’s important to check the trend also.  Here, as long as gold stays inside that channel one might continue to suggest that the trend remains positive.

Having said all that I still go to my normal indicators for my final reading as to the rating for the period.  Gold is still above its positive sloping intermediate term moving average line.  The intermediate term momentum indicator is still in its positive zone but moving lower and has already crossed below its trigger line.   The trigger has also turned to the down side.  The volume indicator remains quite positive and above its positive sloping trigger line.  For the intermediate term the rating remains BULLISH but starting to weaken.  The short term moving average line remains above the intermediate term line for confirmation of this rating.

SHORT TERM

The short term is showing a little more weakness than the other time periods but it’s not yet in the bear category.  Trend changes are usually (but not always) noted in the short term first.  Here, the price of gold did drop below its short term moving average line on Thursday and the line did turn negative just a wee bit but on Friday gold was back just above its moving average line and the moving average turned back just a wee bit to the up side.  We are in an area that any up and down move by the price of gold could change the indicators so unless we get a trend we may be in for more volatility on a daily basis.  The momentum indicator remains just above its neutral line in the positive zone.  It also is moving lower and is below its negative sloping trigger line.  As for the daily volume action, it is somewhat questionable as to its message.  Friday the daily volume was above its average volume of the past 15 days for a good sign as the day was an up day in the gold price.  However, the day before the volume was a little bit higher and also above its 15 day value but that was a down day for the gold price.  So, no real message that you can grab on to.  All in all, as of the Friday close the short term rating is BULLISH but very iffy.  The very short term moving average line is just above the short term line for confirmation of this bull BUT it is moving lower fast and could very easily cross below the short term line on another down gold day.

As for the immediate direction of least resistance, I’ll go with the down side, although there may still be another day or so of upside movement.  The topping process seems to have been completed with the Stochastic Oscillator in its negative zone and still in a downward drift.  The very short term moving average line remains pointing downward and the trend is still towards lower levels despite Friday’s advance.

SILVER

 Silver remains in a short term up trending channel since late Jan.  It seems to want to break to the down side but still remains in the channel.  The recent move into new highs was with slightly diminished momentum but not to the point of being a concern yet.  Although still out performing gold it does appear that silver is getting ready for some sort of reaction to the bull move and new commitments in this area should be carefully reviewed, as they should always be.  All three time periods are still BULLISH as far as the ratings go.

PRECIOUS METAL STOCKS

 It has not been a good week for precious metal stocks, as the Table below indicates.  Dangerous times may be ahead for investors and speculators.

Merv’s Precious Metals Indices Table

Well, that’s it for this week.  Comments are always welcome and should be addressed to mervburak@gmail.com.

By Merv Burak, CMT
Hudson Aero/Systems Inc.
Technical Information Group
for Merv's Precious Metals Central

For DAILY Uranium stock commentary and WEEKLY Uranium market update check out my new Technically Uranium with Merv blog at http://techuranium.blogspot.com .

During the day Merv practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv dons his other hat as a Chartered Market Technician ( CMT ) and tries to decipher what's going on in the securities markets. As an underground surveyor in the gold mines of Canada 's Northwest Territories in his youth, Merv has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv's driving focus is to KEEP IT SIMPLE .

To find out more about Merv's various Gold Indices and component stocks, please visit http://preciousmetalscentral.com . There you will find samples of the Indices and their component stocks plus other publications of interest to gold investors.

Before you invest, Always check your market timing with a Qualified Professional Market Technician

Merv Burak 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