Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
20 Days Left to Find Buying Opportunities In Gold - 25th Mar 19
Will the Historic Imbalance in Gold Stocks to Gold Price Resolve ? - 25th Mar 19
EasySMX Wireless Games Controllers Review - 25th Mar 19
Stock Market Short-term Top - 25th Mar 19
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Gold and Silver Price Plunge, What Triggered the Knife to Fall?

Commodities / Gold and Silver 2013 Jun 23, 2013 - 05:54 PM GMT

By: EWI

Commodities

In the wee morning hours before dawn on Thursday, June 20, the precious metals' rooster crowed, "*****-a-doodle-DOH!"

It was the ultimate wake-up call:

First, gold prices plummeted 4% then 5% then 6% below $1300 per ounce to their lowest level in nearly three years. Soon, silver followed in an even steeper drop below $20.


At 6:45 am, one popular news outlet went live on the scene and wrote: "It's a bloodbath at the moment with most technical support levels being broken ... calling a bottom would be like trying to catch a falling knife." (Marketwatch)

As for what triggered said knife to fall, you ask?

Well, according to the usual experts and every mainstream news outlet under the sun, the gold and silver bottom fell out after investors digested stimulus-tapering comments from the June 18-19 Federal Open Market Committee minutes.

Upon closer examination, though, there are several problems with this notion:

  • Fears of the Fed starting to twist shut its QE tap are anything but new. Gold and silver investors have had months to digest this potentiality.
  • Not to mention the fact that the June 19 minutes made no direct mention of actually stopping its bond-buying program. FED Chairman Ben Bernanke was hypothetical at best, saying, "IF the incoming data are broadly consistent with ... and remain broadly aligned with our current expectations ... it would be appropriate to moderate the monthly pace of purchases later this year."

That's hardly a cease-and-desist order.

  • And, last, gold and silver prices did not fall immediately after the FOMC minutes were released. In fact, they rose. Headline: "Gold Prices Show Muted Reaction To Upbeat Fed" (Mining.com)

In plain terms: Gold and silver's June 20 thrashing was not a news-driven move.

That leaves this explanation: The gold/silver sell-off was the most probable scenario as outlined by the Elliott wave playbook. In this case, that playbook is EWI's Short Term Update.

In the June 17 Short Term Update -- before the FOMC meeting even got started, mind you -- our analysis set the bearish stage in gold and silver via these charts and analysis:

"[Gold]'s overall trading remains weak. The bounce we noted last evening is over.... A decline through $1373 should indicate that wave __ of __ down is under way. The downside potential indicates at least a sell-off into the $1250-1300 range."

"[Silver] remains weak and prices appear on the verge of declining to new lows beneath $20.07.... Our near-term stance remains bearish."

FREE Gold Video from Elliott Wave International

Elliott Wave International forecasted nearly every major trend and turn of the past three years in gold and silver. If you invest in precious metals, you owe it to yourself to see how we got to where we are today. In a 10-minute video titled Gold Defies Bulls' Optimism, Elliott Wave International's Chief Market Analyst Steve Hochberg lays out what has transpired in gold since 2011 so you can understand where it's headed next.

Click Here to See the Video Now -- It's FREE by joining the largest Elliott wave community at no cost >>

This article was syndicated by Elliott Wave International and was originally published under the headline Gold and Silver: A Great Day to be a Bear. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.


© 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