Best of the Week
Most Popular
1.Gold Price Crash Through Key Support, Crude Oil in Freefall - Clive_Maund
2.Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme - Bloomberg
3.Silver Price and Powerful Forces - DeviantInvestor
4.Stocks Bear Market Catastrophe as Stocks Flash Crash to New All Time Highs - Nadeem_Walayat
5.Marc Faber Warns Not to Hold Any Gold in the U.S. - GoldCore
6.U.S. Housing Market San Francisco at Critical Mass - Harry_Dent
7.Global Scramble For Silver - Coins “Hard To Get,” “Premiums Likely To Jump” - GoldCore
8.Major World Stock Market Indices Analysis: SPY, QQQ, DAX, FTSE, CAC, HSI - Michael_Noonan
9.Japan's kaput?! - Axel_Merk
10.Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning! - Nadeem_Walayat
Last 5 days
Investors Hated Gold at Precisely the Wrong Time: What About Now? - 22nd Nov 14
Gold and GLD ETF Selloff - 22nd Nov 14
Currency Wars, the Ruble and Keynes - 21st Nov 14
Stock Market Investor Sentiment in The Balance - 21st Nov 14
Two Biotech Stocks Set to Double on One Powerful Catalyst - 21st Nov 14
Swiss Gold Poll Likely Tighter Than Polls Suggest - 21st Nov 14
Gold's Volatility and Other Things to Watch - 21st Nov 14
Australia Stock Market and AUD Dollar Analysis (ASX200 and AUDUSD) - 21st Nov 14
New Algae Research May Have Uncovered an “Energy Forest” Under the Sea - 21st Nov 14
The Cultural and Political Consequences of Fiat Money - 20th Nov 14
United States Social Crisis - No One Told You When to Run, You Missed the Starting Gun! - 20th Nov 14
Euro-Zone Tooth Fairy Economics, Spain Needs to leave the Euro - 20th Nov 14
Ebola Threat Remains a Risk - New Deaths in Nebraska and New York - 20th Nov 14
Stock Market and the Jaws of Life or Death? - 20th Nov 14
Putin’s World: Why Russia’s Showdown with the West Will Worsen - 20th Nov 14
Making Money While The World Burns - 20th Nov 14
Why This "Quiet Zone" Is Now Tech Stocks Biggest Profit Sector - 20th Nov 14
My Favorite Stock McDonalds Just Got Kicked Off My “Buy” List - 19th Nov 14
European Economies in Perpetual State of Shock, What's Scarier Than Deflation? - 19th Nov 14
Breakfast with a Lord of War and Nuclear Weapons - 19th Nov 14
The U.S. Economy’s Ebb and Flow - 19th Nov 14
What You Need to Know Before Investing in Alibaba - 19th Nov 14
Forget About Crude Oil Price Testing 2009 Low - 19th Nov 14
What Blows Up First? Part 5: Shale Oil Junk Bonds - 19th Nov 14
Bitcoin Price Did We Just See an Important Slump? - 18th Nov 14
How to Profit From Oversold Crude Oil Price - 18th Nov 14
Stock Valuations Outrunning Profits Growth - And the Band Played On - 18th Nov 14
ECB Buy Gold Bullion? Japan's Monetary Policy Dubbed "Ponzi Scheme" - 18th Nov 14
Gold, Silver, Crude and S&P Ending Wedge Patterns - 18th Nov 14
How High Could USD/JPY Go? - 18th Nov 14
On Obama and the Nature of Failed Presidencies - 18th Nov 14
Globalism Free Trade Immigration Connection - 18th Nov 14
An Epiphany From Hell - Buy Gold and Silver - 18th Nov 14
Too Difficult to Get a U.S. Home Loan - 18th Nov 14
Has the Gold Bear Trap Been Set - 18th Nov 14
Gold Price and Miners Soar on Huge Volume - 17th Nov 14
Cameron Says Second Global Economic Crash is Loomin, Japan in Recession - 17th Nov 14
How to Play the Stock Market 2014 Year-End Rally - 17th Nov 14
What The Fed Has Wrought, Who Needs Wage Earners Anyway? - 17th Nov 14
Stock Market Indexes Fluctuate Along Record Levels - Will Uptrend Continue? - 17th Nov 14
Stock Market Trend Deceleration Tends To Precede Corrections - 17th Nov 14
Stocks Bull Market Set to Continue After Consolidation - 17th Nov 14
The World Is Run By Fools, And We Let Them - 17th Nov 14
Gold Price Golden Bottom? - 17th Nov 14
Gold Dragons Grand Strategy - 16th Nov 14
Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - 16th Nov 14
Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - 16th Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

Gold Possibility to Regain Its Medium-term Glitter

Commodities / Gold and Silver 2012 Nov 30, 2012 - 01:10 PM GMT

By: P_Radomski_CFA

Commodities

10 days ago, in our gold and silver stocks essay, we wrote that volatility in the mining stocks sector was mostly emotionally-driven. Since then some of that volatility seems to have transpired to the metals market. Gold dived $25 on Wednesday, immediately triggering rumors of misplaced trades or technical errors. The CME Group denied this had been the case and theories of a large player selling gold off in the morning sprung up like mushrooms.


Regardless of what was the case of the drop, one is clear: these are volatile times and the end of November has proved to be no exception. The month ends almost at the same price level where it began, with substantial action along the way. From this picture comes one conclusion which might be reassuring for gold bugs: the beginning of November turned out to be a local bottom.

The (short-term!) slide in October and the mixed developments in November come as no substantial pain to those of you who had decided to implement some of the ideas we had outlined in our essay on gold and silver portfolio structure. With November almost behind us, precious metals investors turn to December with hope of gold regaining its glitter just as the shops are being decorated for Christmas. One thing that could ruin gold investors’ good mood is a repeat of what we saw during last December when gold declined approximately $200. Actually, gold trades very close to price levels that it traded at before the December 2011 decline begun.

To find out what might be in store for gold, let’s turn to currency charts (charts courtesy of http://stockcharts.com).

We begin with a look at the long-term Euro Index chart. We do this because the overall situation in the currency markets is much clearer from this perspective. There is a flag pattern seen here following a sharp rally which is also a post-breakout consolidation.

As soon as the euro rallies a bit more, an even bigger rally will likely be seen. While a move to 131 would be significant, we would prefer to see the index surpass the 132 level (September high) before declaring that a significant additional rally is very likely. The flag pattern, a form of consolidation, implies that higher index values are more likely than not.

Turning now to the medium-term USD Index chart, a consolidation has been ongoing for over a month, and the index now appears ready to move lower. The decline and consolidation here are a reflection of the upswing and consolidation seen recently in the Euro Index.

All in all, the currency markets are likely to have positive impact on gold in the medium term.

Let’s move on to the yellow metal itself – this time we decided to provide you with the look at gold from the Japanese yen perspective.

The most interesting thing visible on the above gold chart is that when gold declined recently, it allowed the price in yen to verify a move above its declining resistance line. This breakout was verified, and the RSI is no longer heavily overbought. The situation here is bullish.

Is a major bottom in? The recent signal from the SP Gold Stock Extreme Indicator #2 confirms this theory.

There was a strong buy signal seen earlier this month suggesting that the bottom is in. The rebound was seen and the outlook remains bullish as this indicator suggests at least a 2-week rally in gold, silver and mining stocks. Consequently, the bullish implications are still in place.

Summing up, the long-term Euro Index chart and the medium-term USD Index chart suggest that lower values might be more probable than not for the dollar in the medium term. Along with a bullish picture from the gold in Japanese yen chart, the implications here are medium-term bullish for precious metals.

In order to make sure that you won’t miss any of our free essays, we strongly suggest that you sign up for our gold & silver investment mailing list. Sign up today and you’ll also receive 7 days of access to our premium updates, market alerts, premium charts and tools. You’ll also receive 12 best practice e-mails as a starting bonus.

Thank you for reading. Have a great and profitable week!

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Gold & Silver Investment & Trading Website - SunshineProfits.com

* * * * *

About Sunshine Profits

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2014 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

Free Report - Financial Markets 2014