Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Damn the Deficits, Huge Trump Tax Cuts Ahead! - 29th Apr 17
Gold Hostage to Stocks - 29th Apr 17
Warren Buffett Hates Gold… But Here’s Five Reasons You Need To Own It - 29th Apr 17
Stock Market Sentiment, Re-Fueled Along the Way - 28th Apr 17
Calling out the Central Bankers - 28th Apr 17
Fed's Third Inetrest Rate Hike and Gold - 28th Apr 17
USD/CAD - Invalidation of Breakout or Further Rally? - 28th Apr 17
What Happened to the Stock Market Crash Experts Were Predicting - 28th Apr 17
Earth Overshoot Day - Human Population Growth - 28th Apr 17
Misunderstanding GDXJ: Why It’s Actually Great News For Junior Miners - 28th Apr 17
What Makes Bitcoin Casinos So Remarkable? - 28th Apr 17
Financial Markets Improvised Explosives - 27th Apr 17
More Stock Market Short-Term Uncertainty As Stocks Get Close To Record High - 27th Apr 17
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Gold Price Crash - Trend Forecast 2015, Gold Stocks Buying Opportunity?

Commodities / Gold and Silver 2015 Jul 22, 2015 - 09:46 AM GMT

By: Nadeem_Walayat

Commodities

The gold price bear market has continued in 2015 since its mid January 2015 peak of $1307 that had fooled many gold bugs into assuming that the preceding multi-year bear market was finally over and that 2015 would see a strong price rally to possibly even new all time highs! However, so far 2015 has seen a series of failed rally's rolling over into downtrends to new lows, punctuated by flash crash days such as that which took place on the 19th of July that saw a series of flash crashes that lasted no more than a couple of seconds that took the gold price to well under $1,100, to a new five year low of $1080 before recovering to currently stand just over $1,100.


The latest slump in the gold price continues to show how detached the gold bugs are been from reality for the whole of this year every dip in price has been accompanied by highly vocal calls for an imminent bottom and new highs. For instance when I last wrote about Gold in March warning not to get suckered into widespread Gold bugs wishful thinking, which at the time was obsessed with statements that Apple was about to buy as much a 1/3rd of the global gold supply for its new i-watch that would soon push the Gold price to new all time highs, which since the Gold price soon resumed its bear market trending now a new low of $1080 (Gold Price Bull Market 2015 Annihilated by Strong U.S. Dollar).

As ever there is no need to look too far for the real culprit, not for the flash crashes but the over-riding bear market trend which is the US Dollar that has continued to levitate at multi-year highs despite all of the reasons put forward by perma dollar doom merchants for its imminent collapse.

I'll take a look for the prospects for the US Dollar for 2015 in a separate article, however as my original USD forecast excerpted below illustrates that the current USD index of 97 is virtually exactly where I forecast it would be by now over 7 months ago.

14 Dec 2014 - U.S. Dollar Collapse? USD Index Trend Forecast 2015

USD Trend Forecast 2015 Conclusion

My USD Trend forecast conclusion for 2015 is that after the current correction is over by around USD85, that the USD then trends higher towards a target of 98 by mid summer 2014, probably terminating in a spike to just above 100 before correcting back towards 92 by the end of the year as illustrated by the following trend forecast graph.

Gold Price Trend Forecast 2015

In terms of my forecast expectations for the gold price than I refer to my analysis of last December that concluded in the following trend expectation for 2015.

31 Dec 2014 - Gold Price Trend Forecast 2015

Gold Price Forecast Conclusion 2015

My forecast conclusion is for the Gold price to trend lower into August 2015, targeting a low of $1050 before Gold finally makes a low for the year that propels the Gold price to above $1300, probably spiking to approx $1350 during November before correcting during December as illustrated by the below forecast trend graph.

And here's the video version of the above analysis uploaded 1st Jan 2015:

Current Gold Price Against Forecast Trend Trajectory

For what happens next, I could literally cut and paste what I wrote on the 13th of March 2015 (Gold Price Bull Market 2015 Annihilated by Strong U.S. Dollar).

The most recent gold price close of $1,152 compares virtually exactly with the forecast trend trajectory for 13th March 2014 of $1,155. Therefore I see no reason to conduct any significant new analysis at this point in time as the forecast trend trajectory strongly implies that the main trend for the Gold price should be one of continuing to trend lower to at least $1050 during July / August 2015.

However, in the short-term probability favours a bounce of sorts so as to unwind the relentless 7 week downtrend off of the $1,130 to $1,150 support area that could propel the gold price back towards $1,200, though probably failing to reach $1190 before once more succumbing to the main bearish trend and thus a BREAK of the $1,130 to $1,150 support area.

The gold price is showing NO deviation from the trend forecast of over 6 months ago, as in time and price the gold price is homing in on my long-standing forecast low of $1050 by early August. That should set the scene to propel the gold price to over $1,300 THIS YEAR. Therefore I see no reason to conduct an in-depth analysis of the gold price at this point in time, unless I start to see a serious deviation in trend. All that I will add is that the actual low may include a short lived panic spike to just below $1,000.

Gold Traders?

If you have been short this year either through following my analysis or that of your own, then I think now is a good time to start winding down short positions, and tightening stops. Though don't jump the gun and buy for that you need BUY TRIGGERS, i.e. you don't try and pick bottoms even if you think your analysis is spot on, for the market punishes arrogance which means traders can STILL lose even if they get the direction right.

Gold Stock Investors ?

Whilst gold bullion investors have worried over Gold's 10% slide this year, gold stock investors must be weeping as the HUI Gold bugs index illustrates a 32% WIPE OUT!

Wait it gets worse, for extend the chart out a couple of years and the loses double to 60% for Gold stock investors, and similarly the 3 year chart extends to a near 80% LOSS - OUCH! That's what happens when one bets against a bear market.

In terms of what to do I again refer to my original analysis that suggested accumulating Gold bullion and stocks as it moves into its window for a bottom by early August, and given the degree of devastation having taken place in gold stocks, far beyond that suggested by the gold bullion price which thus IS perking my interest, in fact as I write I'm finding myself in the mindset of 'Billy Ray Valentine' of 'Trading Places " BUY, BUY, BUY" from panic selling gold stock holders.

And before asking for stock picks - Note I don't tend to give stock picks and especially for the smaller cap stocks for the obvious reason that investing in stocks is very high risk. Look even a supposedly safe blue cap giant such as BP can have a blowout and then there is the total wipe out of bank stocks shareholders. So unless you really know what your doing, even if you get the market fundamentals right, investing in the small, medium AND large cap stocks can still wipe you out!

This also begs the question what money are the perma-bull gold bugs going to buy stocks with? Because surely if they had bought their calls for the duration of the slide this year alone, never mind during the preceding years, then they would already have bankrupted themselves several times over by now!

31 Dec 2014 - Gold Price Trend Forecast 2015

Gold Investing 2015

The clear investing strategy for 2015 will be for one of accumulating into Gold during first half weakness, as ultimately the Gold price will break out to new all time highs, remember that we live in exponential money printing financial universe, it's just that 2015 or 2016 won't be Gold's years, but who knows 2017 may be the year that the long wait for Gold bugs will finally be over. In terms of exposure, well I have never been a gold bug so my thoughts in terms of exposure are along the lines of 2-3% in a mix of ETF's such as GLD and physical bullion. However that is probably because we have just come through another non Gold friendly year whereas a Gold friendly year, one in which the Gold price soars as many gold bugs hope for would ironically demand greater exposure to gold due to how bad things will have become in terms of holding other assets such as Bonds.

So how much gold to hold is not clear cut and depends on the state of ALL markets. And even then it depends on which assets one already holds i.e. asset classes that are most distant from gold in terms of ability to be printed so if you have virtually all of your wealth in cash in the bank or bonds then you need to own a lot of gold, perhaps 15%, off course if your 100% in cash then it would be wiser to diverse across a range of asset classes rather than plunge heavily into just gold. Whilst if most of ones wealth is in property then 2% or 3% should suffice.

At the end of the day I view gold exposure in terms of insurance for what drives the gold price higher (inflation & uncertainty) tends to be bad for ordinary people. And what tends to result in run away bull runs (financial crisis) tends to be very bad!

So all those praying for a gold bull run to the likes of $5,000 may regret the world they are living in that delivers Gold priced at $5,000. Much as the religiously infected amongst us who crave imminent armageddon so that they may ascend into paradise.

Ensure you are subscribed to my always free newsletter for ongoing in-depth analysis and detailed trend forecasts that include the following planned newsletters -

  • Gold Price Forecast Second Half 2015
  • US Dollar Trend Forecast Update 2015
  • Islam 2.0 - Why Thousands of Muslims Are Going to Live, Fight and Die in Syria / Iraq

Also subscribe to our Youtube channel for notification of video releases and for our new series on the 'The Illusion of Democracy and Freedom', that seeks to answer questions such as 'Did God Create the Universe?' and how to 'Attain Freedom' as well as a stream of mega long term 'Future Forecasts'.

Source and Comments: http://www.marketoracle.co.uk/Article51556.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 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

Catching a Falling Financial Knife