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
Stock Market Bull Trap? January 22 Top Likely - 19th Jan 19
After the Crash, the Stock Market Made a V-shaped Recovery. What’s Next - 19th Jan 19
David Morgan: Expect Stagflation and Silver Outperformance in 2019 - 19th Jan 19
Why Brampton Manor Academy State School 41 Oxbridge Offers is Nothing to Celebrate! - 19th Jan 19
REMAIN Parliament Prepares to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 19th Jan 19
Gold Surges on Stock Selloff - 18th Jan 19
Crude Oil Price Will Find Strong Resistance Between $52~55 - 18th Jan 19
Stock Market’s Medium Term is No Longer Bullish. It is Now Mixed - 18th Jan 19
SPX and Gold; Pivotal Points at Hand - 18th Jan 19
Fable Media Launches New GoWin Online Casino Affiliate Site in UK - 18th Jan 19
The End of Apple! - 18th Jan 19
Debt, Division, Dysfunction, and the March to National Bankruptcy - 18th Jan 19
Creating the Best Office Space - 18th Jan 19
S&P 500 at Resistance Level, Downward Correction Ahead? - 17th Jan 19
Mauldin: My 2019 Economic Outlook - 17th Jan 19
Macro Could Weaken After US Government Shutdown. What This Means for Stocks - 17th Jan 19
US Stock Market Indexes Reaches Fibonacci Target Zone – Where to Next? - 17th Jan 19
How 2018 Was For The UK Casino Industry - 17th Jan 19
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19
How Unrealistic Return Assumptions Are Ruining Your Stocks Portfolio - 10th Jan 19
What’s Next for the US Dollar, Gold, Stocks & Bonds? - 10th Jan 19
America's New Africa Strategy - 10th Jan 19
Gold Mine Production by Country - 10th Jan 19
Gold, Stocks and the Flattening Yield Curve - 10th Jan 19
Silver Price Trend Forecast Target for 2019 - 10th Jan 19

Market Oracle FREE Newsletter

Bitcoin Analysis and Trend Forecast 2019

Gold Price Forecast: Nasty Naughty November Gold Price Trend

Commodities / Gold and Silver 2016 Nov 22, 2016 - 03:24 AM GMT

By: I_M_Vronsky

Commodities

As all are well aware the price of gold initiated a new bull market since December 2015 (rising from $1,050 to its $1,376 peak in early July this year. Indeed it was a spectacular bull price run where gold soared more than +30% in only six months. Indeed spectacular!

Subsequently, the bull trend petered out in early July. Since then the price of gold has been steadily declining. Moreover, there are several reasons for this on-going price consolidation…and why it has yet to put in a bottom:

  • 3-Month T-Bill Yield Soaring
  • US$ Index Surges
  • US$ vs 3-Month T-Bill
  • Weekly $UST1Y vs USD Chart
  • Point&Figure Projections (Gold, USD and Silver)
  • Traditional November Gold Price Decline

Six Analytical Tells Suggesting A Lower Gold Price

3-Month T-Bill Yield Soaring

(Source:  http://tinyurl.com/hbkzlbp )

The US 3-Month T-Bill yield has begun to soar. In fact it is presently at nearly 5%...an eight year high. As history is testament this will attract millions of international investors to the US Dollar. Correspondingly, the greenback should continue to rise (as shown in the following chart).

US$ Index Surges

(Source:  http://tinyurl.com/hj7nlf7  )

To be sure the gold price usually (but not always) runs inverse to the value of the US$ Index. Moreover, the above chart clearly shows the US$ has been slowly rising from early 2014, but has additionally built a Bull Flag Formation, which has recently broken above the bull pattern…thus signaling higher values for the US greenback.

US$ vs 3-Month T-Bill

(Source:  http://tinyurl.com/gv2avp8  )

Undeniably, since 2011 the US Dollar Index runs on-balance and in tandem with the US 3-Month T-Bill Yield. Moreover, the T-Bill yields have been surging upward during this month of November…thus suggesting further strengthening of the US$. 

Weekly $UST1Y vs USD Chart

Clearly, the US Dollar Index runs overall and in approximate tandem with the US 1-Year Treasury Yield.

(Source:  http://tinyurl.com/zegaooh )

Continued rising of these two metrics forecasts lower gold prices.

Point&Figure Projections (Gold, USD and Silver)

Point&Figure Analysis is NOT an exact science. Nonetheless, it is an additional indicator to help guide ones decision making to determine the possible price objectives going forward.  Here are the most recent price objective charts of Gold, US$ and Silver per P&F Analysis.

(Source: StockCharts)

Traditional November Gold Price Decline

Among the Analytical Six Tells Suggesting A Lower Gold Price, this analyst believes the most reliable gold price forecaster is the Traditional November Gold Price Decline.

Indubitably, the gold price in past Novembers has been an open season killer of Gold Bulls.  Here is what occurred in Novembers past:

During November 2011 gold price fell  -9.1%

During November 2012 gold price fell  -4.1%

During November 2013 gold price fell   -9.8%

During November 2014 gold price rose +1.1%

During November 2015 gold price fell   -7.9%

Excluding the November 2014 results which was an anomaly to the traditional November price action, the average four year November decline for the price of gold was -7.7%.  Applying this to the present situation, forecasts the possibility of gold dropping to about $1,175 sometime before December.

(Source: http://stockcharts.com/freecharts/seasonality.php?symbol=%24GOLD  )

As the above Gold Seasonality table demonstrates, November is traditionally the worst month for the gold price (during the past five years – excluding 2014).

Summary And Conclusion

Based upon the overall conclusions of the above six tells suggesting a lower gold price, there is high probability the value gold may decline to about $1,175 by the end of this month (based upon the average November declines since 2011 - excluding 2014). And although Point&Figure analysis is NOT an accurate price forecasting metric, prudent investors should not exclude the possibility the price of gold may even fall to $1,087 (per the Double Bottom Breakdown as shown above in P&F).  Additionally, a daily bar chart of gold shows a Bear Market Flag that has already triggered, thus producing a price objective of about $1,080…which might materialize sometime before yearend.

HOWEVER, once the bottom is established, the price of gold will indubitably soar to new all-time highs in 2017 and years beyond…as the US stock market plunges into a long overdue Bear Market. Moreover, the unprecedented 34 year bond bull market appears to be faltering…and may also plunge to begin a very long overdue BEAR MARKET TREND.  Consequently and indubitably, panicked bond investors worldwide will flee to the historical safe-haven of gold.

By I. M. Vronsky
Editor & Partner - Gold-Eagle
www.gold-eagle.com

Founder of GOLD-EAGLE in January 1997. Vronsky has over 40 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a Financial Analyst with White Weld.  He believes gold and silver will soon be recognized as legal tender in all 50 US states (Utah and Arizona having already passed laws to that effect). Vronsky speaks three languages with indifference:   English, Spanish and Brazilian Portuguese.  His education includes university degrees in Engineering, Liberal Arts and an MBA in International Business Administration – qualifying as Phi Beta Kappa for high scholastic achievement in all three.

© 2016 Copyright I. M. Vronsky - 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.


© 2005-2018 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