Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Forming a Bullish Consolidation

Commodities / Gold and Silver 2011 Sep 19, 2011 - 10:21 AM GMT

By: Jordan_Roy_Byrne

Commodities

Best Financial Markets Analysis ArticleThis is an important juncture for Gold and let me say the analysts. We are starting to see some disagreement on Gold and that is natural after a strong surge. It is a small part of the reason why Gold is likely to soon replicate its last move. We believe the market is ready for another big move that could leave many on the sidelines. It is somewhat of a contrarian call. After a 25% surge in less than two months its natural to assume its overbought and a correction is needed but the evidence favors another surge higher.


First, we’ve been talking about an acceleration in Gold for months. It finally happened or is happening. We can see that the market has accelerated past the trendline (and also a longer trendline shown in previous charts). The acceleration is bullish but more important is that the market is holding well above this previous resistance which indicates that the acceleration and not the former trend remains in effect. Secondly, Gold has only retraced (the minimum required) 38% of the move. Third, note that in the past two years Gold bottomed about five times at the 150-day moving average. Most recently it bottomed at the 100-day right before the surge.

The next day or two could be critical as Gold is likely to test the low near $1750. A strong rebound would solidify that bottom and it would ocurr well above the 100-day moving average and well above previous trendline resistance. See the chart below.

Meanwhile the commitment of traders report (COT) is quite encouraging. Over the past two years the commercial short position has ranged from roughly 200K to 300K contracts. As of last Tuesday, the commercial short position was 227K contracts. Now keep in mind this is as of last Tuesday when Gold closed near $1880. In other words, the next reading is likely to be fairly close to 200K contracts.

Furthermore, the action in the equities has also been encouraging. The mining equities have held up quite well during this period of weakness in the metals. This includes Thursday’s action. Gold closed down 1.7% yet GDX and GDXJ closed down fractionally while forming a bullish reversal pattern. Silver closed down 2% while SIL closed down only 0.8% and also formed a bullish hammer. Moreover, a handful of our favorite silver companies are trading near April high while Silver is more than 20% off its April high.  

There you have it. Emotion may tell us to worry, be cautious and expect more weakness and a prolonged consolidation. It could happen. I am in the business of managing risk and assessing probabilities. The evidence says otherwise. And by the way, the equities are already showing relative strength. Couple that with a big move higher in Gold and we could see a very strong move the next few months.

If you’d be interested in professional guidance then we invite you to learn more about our service.

Good Luck!

Jordan Roy-Byrne, CMT
Trendsman@Trendsman.com
Subscription Service

Trendsman” is an affiliate member of the Market Technicians Association (MTA) and is enrolled in their CMT Program, which certifies professionals in the field of technical analysis. He will be taking the final exam in Spring 07. Trendsman focuses on technical analysis but analyzes fundamentals and investor psychology in tandem with the charts. He credits his success to an immense love of the markets and an insatiable thirst for knowledge and profits.


© 2005-2022 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