Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Gold Stocks Trend Forecast Into 2014 - Historic Buying Opportunity Coming

Commodities / Gold and Silver Stocks 2013 Sep 17, 2013 - 08:09 AM GMT

By: Jordan_Roy_Byrne


Recently we’ve been writing that another opportunity is coming to buy gold stocks. While this is still the case, the facts have changed and we have to tweak our view. The evidence argues that the mining stocks are now likely to retest their lows. Rather than that buying opportunity being days away, we now feel it is weeks away. Investors and speculators need to have more patience. In this missive we discuss why a retest is coming but why it could mark a final bottom and a tremendous buying opportunity.

The first reason I expect a retest is the current recovery has veered off historical course. At the current juncture three of the four similar recoveries (chart below) were at a new recovery high and the fourth closed at a new high next week. Simply put, last week was the turning point. This is confirmed by the stocks slicing through their 50-day moving averages rather than holding.

Second, the monthly chart has also veered off course. Until the end of August, the June to August pattern resembled that of the October to December pattern in 2008. However, gold stocks reversed course at the end of August and are down 9% this month. This is not the type of action you see following a major bottom.

The third point is that I made an error in my last editorial. In 1976 Gold made a V shaped bottom because it declined for 18 months without any multi-month interruption. Sure, precious metals have been extremely oversold as the current bear market is two years old. However, I neglected the obvious fact that there was a huge reprieve in 2012. Gold rallied back to $1800 and many stocks reached new all-time highs. From this vantage point, precious metals have been very oversold for less than a year and thus not enough to produce a bottom without a retest.

Hours before the late June bottom I penned an editorial discussing why I felt a major bottom was imminent. Bearish sentiment was rampant. The gold stocks were nearing 9-year support. Moreover, the large caps had lost about two-thirds of their value. My historical analysis showed that only one bear market exceeded 70% and that was the cyclical bear which followed the end of the 1980 bubble and a 20-year bull market in gold stocks.

Furthermore, the gold stocks had a nearby Fibonacci target that aligned perfectly with the 2011 top, 2012 bottom and the start of the 2013 crash. That target is within 1% of the late June low. See the chart below.

The points mentioned above don’t get thrown out the window just because the market has failed to breakout. They are still as valid as they were a few months ago. The fact that a retest is coming doesn’t invalidate those points.

Below is a sketch of how things could potentially play out over the coming months. I say potentially because no one can predict the future. We can analyze history, tendencies and probabilities to come up with a reasonable guess. Given the evidence, I find it reasonable that the sector is not going to breakout anytime soon. At the same time, I find it unreasonable to expect the equities (especially GDXJ and SIL) to make new lows.

Near-term goals should be to make sure you are hedged if you are heavily long and to make sure you have some cash to take advantage of the final bottom which could occur in the next month or so. Note that the major bottom in 2000 occurred in November while the 2008 low came in late October. I guess the calendar is ripening for another major bottom. Of note is that GDXJ and SIL are in stronger shape than GDX. GDXJ declined 79% and recently rebounded 63%. SIL declined 65% and recently rebounded 55%. Those rebounds occurred in only two months! Just imagine the gains we could see after this retest. Readers are advised to watch closely and spot the companies which show the most strength during this retest.

If you'd be interested in professional guidance in this endeavor, then we invite you to learn more about our service.

Good Luck!

Service Link:

Bio: Jordan Roy-Byrne, CMT  is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2013 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor.  Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.

Jordan Roy-Byrne Archive

© 2005-2019 - 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