Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Has Lost Its Glitter Again!

Commodities / Gold and Silver 2012 Oct 20, 2012 - 01:34 PM GMT

By: Sy_Harding

Commodities

Best Financial Markets Analysis ArticleAfter experiencing a remarkable bull market run from $250 an ounce in 2001 to $1,900 an ounce last summer, gold has not had an easy time of it since.

Three times it plunged as much as 19%, and rallied back, only to run into resistance each time at $1,800. It is potentially doing so again.


That’s probably puzzling investors who have been seeing so many big-name analysts and fund-managers become very bullish for gold, with reasoning that seems sound.

The latest Reuters poll shows precious metals analysts have become more bullish for gold and silver than they have been in several months.

Even technical analysis was backing the bullish outlook. My technical indicators triggered a sell signal on February 19, almost exactly at that peak, but had me and my subscribers back on a buy signal in mid-August and back into a 20% position in the gold etf GLD.

The case for gold, at least from the fundamental side, still sounds bullish.

As Ray Dalio, chief investment officer at Bridgewater Associates, the world’s largest macro hedge fund recently told CNBC viewers, “We have a situation where there is too much debt, which leads to central banks printing money, which is bullish for gold.”

Other analysts add that fears of the looming ‘fiscal cliff’ in the U.S., and possibility that rating agencies will downgrade the credit rating of the U.S. again, are positives for gold over the next several months.

There is also the expectation that the Fed’s latest QE3 program will be inflationary, and gold is the traditional hedge against inflation.

Then there is the history that gold often (but not always) moves opposite to the U.S. dollar, and the dollar has been in a decided decline since July.



So what is going on that gold’s latest rally attempt again ran into resistance at $1,800 an ounce, triggered a sell signal on technical indicators like the Stochastic Oscillator, and gold has plunged $70 an ounce over the last couple of weeks?

I’m still long-term bullish on gold and its problem is probably just that sentiment for gold became over-heated and needs to cool down some.

For instance, according to Reuters, gold’s spike-up rally since August had investors piling into gold etfs at such a pace it forced the etf’s to raise their holdings of bullion to a record 2,681 metric tonnes.

And CFTC data shows hedge funds have raised their gold futures holdings to their highest levels in almost 14 months. The extreme bullish sentiment for gold could also be seen in the excitement for it on the financial TV shows.

So perhaps gold’s problem will be relatively short-term, perhaps a pullback to the previous support at its 30-week m.a., just to get the sentiment cooled off some before the upside resumes.

But with the 30-week m.a. at $1,650 an ounce, even that would be a $140 an ounce decline from its recent high, not something I’m willing to endure.

And given the way gold’s long bull market potentially topped out last year and has a potential triple-top in place, maybe there’s something more fundamental going on.

Could gold possibly be saying that the ‘fiscal cliff’ will be successfully resolved? Or that central banks are going to aggressively sell gold from their reserves to raise cash to help with their debt loads? Or that the global economic slowdown will continue and result in deflationary pressure rather than rising inflation?

I don’t have the answer to those questions. So I suggest simply following the charts and letting  the indicators tell us when the downside momentum and money flow reverses to the upside enough to trigger our next buy signal.

Sy Harding is president of Asset Management Research Corp., and editor of the free market blog Street Smart Post.

© 2012 Copyright Sy Harding- 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 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