Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Now is the Time to Short Gold and Silver

Commodities / Gold and Silver 2015 Oct 18, 2015 - 03:33 PM GMT

By: Submissions


Tony Mermer writes: Gold's recent rally has convinced many investors and traders that the precious metals bear market is over. I disagree. Since I believe that the gold and silver bear markets are not over, the recent rally is merely a rally within this bear market. This rally is probably over, so here's why now is the time to short gold and silver.

This rally is becoming old

Gold has rallied since the middle of July 2015 when it reached $1070. This means that the rally has already lasted more than 3 months. Historically speaking, gold's bear market rallies do not last more than 3 months.
  1. Gold's rally from early November 2014 to mid January 2015 lasted 2.5 months.
  2. Gold's rally from January 2014 to mid-March 2015 lasted 2.5 months.
  3. Gold's rally from late June 2013 to late August 2013 lasted 2 months.
  4. Gold's rally from May 2012 to October 2012 lasted 5 months.
  5. Gold's rally from December 2011 to February 2012 lasted 2 months.
  6. Gold's rally from September 2011 to November 2011 lasted 1.5 months.
As you can see, each rally within this bear market lasted no more than 3 months, with one exception. The one exception - the rally from May to October 2012 - can easily be explained. Although gold's absolute bottom was in May 2012, it essentially made a flat bottom from May to August. Thus, the real rally in that case only lasted 2 months. if recent history is any example, the current gold rally should not continue much farther.

Gold and silver are up against a ton of resistances

Gold and silver are rallying up against a bunch of resistances. Any breakout above these resistances is likely to be a false breakout. Silver is running up against it's 200 sma. As you can see, the 200 sma has been admirable resistance over the past 2 years.

Gold is also running up against its 200 sma resistance. Is it making a false breakout? Perhaps.

In addition to the moving average resistances, precious metals related assets are running up against some long term resistances. Silver is facing resistance from its long term trendline. This trendline has capped silver throughout this entire bear market.

Likewise, the gold miners ETF GDX is facing resistance from its long term trendline. This trendline has capped GDX throughout this entire bear market.

The U.S. dollar is ready to rally

The U.S. dollar's bull market is not over. All bull markets have at least 2 rallies, and the USD's rally from mid-2014 to early 2015 was only the first rally in this bull market. Thus, the U.S. dollar's bull market has at least one more rally. The U.S. dollar has been in a long correction since March 2015. In other words, this 7 month correction is about as long as corrections get. The U.S. dollar is ready to rally to new highs any day now. In addition, the Euro is very close to retesting its August 2015 high of $1.17. Should this resistance hold, the U.S. dollar's bottom will be in. A bullish U.S. dollar is bearish for gold, silver and gold mining stocks. After all, it's the U.S. dollar's rally that caused precious metals related assets to decline from the middle of 2014 to the end of 2014.

By Tony Mermer

I'm Tony Mermer, founder and CEO of Investing Track ( We are a privately held quantitative investment firm.

© 2015 Copyright  Tony Mermer - 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 - 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