Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis - 9th Aug 22
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22
What it's like at a Stocks Bear Market Bottom - 29th July 22
How to lock in a Guaranteed 9.6% return from Uncle Sam With I Bonds - 29th July 22
All You Need to Know About the Increase in Building Insurance Premiums for Flats - 29th July 22
The Challenges on the Horizon for UK Landlords - 29th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold: New Month, New Direction?

Commodities / Gold & Silver Feb 02, 2008 - 08:22 PM GMT

By: Joe_Nicholson

Commodities

Best Financial Markets Analysis Article“Though gold moved to record highs again this week, that doesn't rule out the possibility of a corrective phase having begun earlier this month. A simple three-wave correction could climb as high as $940-950 before being invalidated. Any failure of a pre- or post-Fed rally in this area would suggest a five-wave decline to about $800-830. The Fed… has lost the appetite for disappointing the markets. Though the rate-cut should suggest further upside in metals, this is the context in which readers should… act. Though silver could reach $17.40-17.50 before invalidating a return below $10, support between $12-$15 , especially in the strong band in the $13.75-14.25 area, tends to support further upside.” ~ Precious Points: Can't Keep a Good Metal Down, January 26, 2008


Through prospects of a rate cut and precious metals rally looked good going into last week, TTC members had a line in the sand for gold to cross before invalidating a painful count that could see a retreat to $800 or lower. The day of the FOMC statement came and went without invalidating that count and Friday's sharp selloff seems to be its confirmation.

Though this may disappoint some of those looking for a quick move to $1000 or beyond, as you can see, this is hardly a call for a crash in gold. In fact, some would say a healthy pullback would be in order at this point to help build a foundation for the next several-hundred point.

This is also not the only possible count in gold, but since it was anticipated and seems to be confirmed, it is in my opinion the operative one. Notice we've already seen the start of support above the 5-week moving average, about $900, and could see a healthy retracement next week that still won't preclude further declines if not making a significant new high. Should this pattern play out, minimum downside is about $840, but could extend to test the strong support at $800. The movement from this area would help establish a clear count for the January 15 th high and determine the direction for several months.

Significantly, silver fared much better than gold this week, though it has not invalidated a corrective count either. Remember, that wouldn't occur until nearly $17.50 in silver, and unless a sharp rally in gold to silver ratio is about to begin, it's doubtful silver will move that much further independent of gold. Silver did close on support at the 5-day moving average and this level will be crucial early next week in determining support and resistance.

While gold in particular took a hit late last week on strength in the dollar prompted by economic deterioration oversees and speculation of a rate cut from the ECB, it should be noted palladium, a platinum group metal, made a significant upside move this week that could bode well for all the PGMs. Though a rally to at least $420 is needed to confirm the move, the recent break of multi-month resistance at $390 for now suggests against being up in b with the possibility of c down going below $32o. Instead, it's tempting to label 1,2,1,2 of an impulse upward to new highs. Strength in the PGMs in general comes as production in South Africa ground to a halt under severe electricity shortages.

o, with the new month we may be seeing a new trend direction in gold and silver, even if there's a bit of a rebound next week. Uncertainty about banks, mortgage insurers, and foreign monetary policy has created chaotic patterns in most markets, including gold and silver. A platinum group metals play based on shrinking supply could be a haven if the more monetary metals are due for a near term correction.

by Joe Nicholson (oroborean)

www.tradingthecharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts,, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual.  Check with your licensed financial advisor or broker prior to taking any action.

Joe Nicholson 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